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Best known for providing wireless card payments for vending machines and unattended locations such as coin laundries, USA Technologies Inc. (USAT) is challenging Square Inc. and other mobile-payments providers in a move to get more mileage out of its specialty processing system.
After introducing its mobile services last year, the company is in the midst of a direct-marketing push and online and print advertising campaign promoting ePort Mobile, which it launched in May 2013. EPort Mobile is a service for small mobile merchants that takes the name of USAT’s ePort brand name for its hardware and wireless network, and includes a smart-phone card reader. Malvern, Pa.-based USAT followed up in August with the launch of a variant called ePortGo, a mobile-payments service for taxi and limousine drivers.
USAT will not say how many taxi and limo companies have downloaded its ePortGo app and are using the card swipe, but it does say that it now has 12,000 current or pending connections from the industry to its ePort Connect network.
Beyond taxis and limos, USAT is seeking merchants such as plumbers, electricians, heating-ventilation-air conditioning (HVAC) contractors, and other small businesses that do most of their work outside the office. One component of the marketing push includes a postcard with a picture of chip card being swiped through a smart-phone reader under the header, “Think Outside the Square.”
“You’ll see more and more marketing in that space,” promises Michael K. Lawlor, USAT’s senior vice president of sales and business development.
Like the high-profile Square, USAT is emphasizing straightforward pricing in its mobile-payments push. Depending on ticket size, merchants will pay anywhere from 2.95% down to 2.25% of the sale. “I think what a lot of mobile merchants like is simplified processing,” says Lawlor. “The traditional mobile card-acceptance solution … that uses interchange and fees—there’s pushback from the marketplace.”
Beyond pricing, USAT thinks it has a winning distribution formula and value-added services that will stand out in an increasingly crowded mobile-payments marketplace. Various independent sales organizations and system integrators in addition to mobile-phone services giant Verizon Wireless offer USAT services to their customers. USAT has created a business-to-business package that includes connectivity from Verizon Wireless, a phone from any of several manufacturers running Google Inc.’s Android operating system, ePort Connect processing, and the card reader. The company is aiming the package at businesses that don’t want employees using their personal phones for business transactions.
In addition, USAT is providing dispatching and navigation services to taxi and livery drivers. “It’s a fully integrated, completely scalable service,” Lawlor says.
While it is trolling for what it calls micro-merchants, USAT, unlike Square and some other mobile-payment players, is not pursuing part-time sellers who want an app that enables them to accept card payments at flea markets or from their homes. “We are really focused on the B2B or business applications here,” says Lawlor.
Gary Prestopino, an analyst at Chicago-based Barrington Research Associates Inc. who follows USAT, says the company stands a good chance of making inroads in mobile payments because of its apparent success with taxis, given ePort Connect’s reported 12,000 industry connections. “Initially it’s very positive, and I hope they continue to execute,” says Prestopino. He adds that many cabs already have card-acceptance systems, but “they’re slow, cumbersome and they don’t work.”
USAT disclosed Wednesday that it now has a total of 250,000 connections to the ePort Connect network, double the connections it had three years ago. The company also has partnered with Isis, the mobile-payments venture of Verizon Wireless, AT&T Mobile and T-Mobile, and has brought Isis 75,000 contactless payment sites, mostly vending machines.
