Eye on Mobile Payments: Intuit, Bango Launch Card Services

Intuit Inc. on Thursday entered the race to sign up plumbers, carpet cleaners, delivery people, and other small on-the-go merchants for card acceptance. The Mountain View, Calif.-based vendor of the popular QuickBooks accounting program rolled out a product, called GoPayment, that works on mobile phones but doesn't require other hardware, such as an external card-swipe device or printer. The product is intended to meet a need for electronic payment in a business segment heavily reliant on cash and checks and hard hit by the recession. Intuit cites research indicating that some 22 million very small businesses in the U.S. have a backlog of some $33 billion in overdue payments from customers. Almost 40% of surveyed business owners said they saw a rise in sales after offering card acceptance. Intuit's “Get Paid Survey” was conducted online in October among 751 small-business proprietors with fewer than 10 employees. Intuit will not say how many merchants are using GoPayment so far, though it quotes the owners of a Sunnyvale, Calif., business, Paradise Carpet Cleaning, in a press release. “That was one of our first customers,” says an Intuit spokesperson in an e-mail. “We're still in the very early stages of the launch of GoPayment, so we are unable right now to talk about customer numbers and projections.” To use GoPayment, merchants enter card numbers, expiration dates, and other data from the customer's card into data fields that appear on the handset screen. Owners can manage multiple users and monitor transactions on a PC through a so-called merchant service center. Users of Intuit's QuickBooks software can download GoPayment data to their company files. Businesses must open a merchant account with Intuit Payment Solutions, formerly Innovative Merchant Solutions, a Calabasas, Calif.-based independent sales organization Intuit bought in 2003 for $116 million. To process transactions through an Intuit site on the mobile Web, merchants can use any Web-enabled handset from any carrier. To use a downloadable GoPayment application, the merchant must have an account with Sprint, AT&T Mobility, or Verizon Wireless. The application works with 11 models of handsets, including the Sanyo Pro 700 on Sprint, the Motorola Razr on AT&T, and models of the BlackBerry Curve on all three networks. While no external hardware is required, a connected card swipe device will net a lower fee for merchants, since the card networks assess lower interchange for card-present than for card-not-present payments. The swipe also automatically populates the data fields on the handset screen. Intuit is levying a discount fee of 1.64% on transactions processed with the optional card reader. The fee without a swipe is 2.44%. For loyalty or corporate cards, however, the fee is 3.54% for both card-present and card-not-present transactions. The program offers Bluetooth-enabled card readers from Blue Bamboo (at $218.95) and from MagTek Inc.'s MagneSafe unit ($144.95). Other costs include a monthly fee of $19.95 and a $59.95 one-time setup fee for the merchant account. Intuit says merchants can cancel GoPayment at any time with no termination fee. Merchants can also link a receipt printer to their mobile phones or they can text a receipt to the customer through short-message-service (SMS) technology offered by VeriSign Inc. In related news this week, mobile Web technology vendor Bango.net Ltd. launched Bango Credit Card Payment, a service that lets businesses charge customers' credit cards for digital downloads. The program, which costs merchants $9.99 per month, offers single-click checkout after the first use. It is intended chiefly for customers using smart phones. “With the current rise in smart phone users, a lot of businesses who have never considered mobile before are now looking at how they can capture revenue from this new market,” said Anil Malhotra, senior vice president of alliances and marketing at Bango, in a statement. “And many of these smart phone users, such as those with a BlackBerry or Google phone, are used to using the Web on their phones, and are familiar with credit card services.” Merchants use the service by integrating it into their mobile Web sites, a process Bango says can be completed “in minutes.” Bango, which has headquarters in the U.K. but maintains a New York City office, says it relies on multiple processors to handle payments globally in a variety of currencies.