September 30, 2010
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News: New Competition For Cell Phone Apps
There's a new company that is ready to give companies that offer cell phone and point-of-sale credit card processing a run for their money. The company, MobilePay USA has challenged the industry with its new application that they say uses the iPhone and does not require cardholders carry around their credit cards. The program was the winner of the Audience Choice award at the TechCrunch Disrupt show. At the show, President of MobilePay, Kyle Circle said the application was not yet ready for release but should be ready sometime in November. Circle said that MobilePay does not require the use of hardware and digitally stores the credit card information within a secured payment provider.
MobilePay will be a direct competition with Square which uses a small device that is attached to the phone and serves as a credit card reader. Circle also talked about the high cost of Near-Field Communications (NFC) that is the driving force behind Visa's public transportation systems trial in New York City. The MobilePay app uses the phone's GPS system to locate the check in point to find the merchant where the transaction is to take place and then the user enters a PIN into the iPhone. The program also allows for entry of tips and discounts. The PIN uses tokenization to transmit the card information to the merchant. The payment is processed through the merchant's credit card payment processing service and the customer receives his paper receipt.
Cardholders who wish to sign up for the application will be able to do so by entering his credit card information online. Hence, if the phone is lost, the thief does not have access to the card information. The app also allows for the MobilePay to be turned off remotely if necessary. An added security benefit if the phone should be lost or stolen. The service will cost one percent. The party responsible for paying the one percent has not yet been determined.