Mobile payments on the rise
Square has been all over the news lately, most recently with the announcement that the system is now live at more than 7,000 Starbuck’s locations, and many business owners use it to process sales on the go, swiping cards via a reader attached to a phone or iPad. The startup has garnered a lot of traction, and many companies are releasing similar products to compete along with it. Bank of America is one of the most recent entrants, launching its Mobile Pay on Demand app and reader, both of which will allow its account holders to more easily conduct mobile sales and receive payment.
The fee per swipe is 2.7 percent of the purchase price, which is .05 percent cheaper than Square’s fee of 2.75 percent. There is a 3.5 percent plus 15 cent fee for keyed transactions. The reader is designed similar to that of the Square reader except that it boasts a red trim and the Bank of America logo imprinted on the front. Merchants can process Visa, Discover, American Express and MasterCard payments, and the app and reader are free.
How Bank of America’s service differs
Bank of America differentiates its offering by noting it is the first financial services company to offer a mobile payment system, allowing Bank of America account holders to transfer money made from sales directly into their checking accounts. When a card is swiped, the card numbers are encrypted and truncated to allow for a secure payment process. To complete the sale, customers sign using the phone or tablet’s touch screen, and after the sale, merchants can send customers an e-receipt via email, detailing the transaction for record keeping purposes.
As more players continue to enter into the market, it’s apparent that Mobile payment systems are having their moment. Business owners are looking for ways to conduct business anywhere they go, and companies are ramping up efforts to provide them with these capabilities.