Instead of dipping its toe into the mobile-payments pool, Heartland Payment Systems Inc. intends to make a splash with an application and a card reader that attaches to a smart phone like Square's or VeriFone's payWare Mobile readers. The target is small and midsize merchants that have long lines in stores that want to reduce or folks out in the field accepting payments.
The Princeton, N.J.-based merchant processor announced Aug. 9 its launch of Mobuyle, an application for merchants seeking mobility and security. Heartland says it is the first U.S. processor to develop its own mobile-payment application for use within stores.
"Mobuyle is designed to work with a portable device, making it flexible in a lot of retail settings," says Steve Elefant, Heartland chief information officer. "But it is also for a mobile workforce, be it a plumber or a pizza delivery person, so the merchant can have a sales force in the field" completing transactions, he says.
Mobuyle operate on Google Inc.'s Android smartphones and tablets. Heartland says it plans to release applications later this year for other smartphones and mobile products, including Apple Inc.'s iPhone, iPad and iPod Touch devices.
Research and development of Mobuyle took nearly a year, as Heartland chose the Android operating system because of its widespread use and the processor's drive to "develop a functional application for real merchants who make a lot of transactions" and who would benefit by having mobile-payment terminals that can reduce customer lines in their stores, Elefant says.
Heartland's entire force of 1,000-plus salespeople will be introducing Mobuyle to the processor's merchants, who may download the Mobuyle application for free at the Android Market. Merchants also may purchase the Mobuyle Encrypting Reader that plugs into their phone's audio jack directly from Heartland, Elefant says.
The security of the application after a card is swiped through the reader was a top priority for Heartland, with encryption through the entire process, Elefant says.
All sensitive information is encrypted before it leaves the reader, protecting data in transit and never storing cardholder information on the device, Elefant says.
Heartland adds another layer of security by using unique encryption keys to protect data. Additionally, all communications from the phone to the point-of-sale gateway are secured with encryption.
Heartland also pitches Mobuyle as a less expensive mobile-payment alternative for merchants because it will charge rates similar to those applied to traditional card processing instead of a higher flat fee for all transactions that some other processors charge.
"We are not trying to be a one size fits all (for pricing)," Elefant says. "Our pricing will take into account the Durbin (amendment) rates for debit cards, and the credit card rates will be well under 2%." Under the amendment, the Federal Reserve capped debit interchange, essentially halving it fro m the current average of 44 cents per debit transaction, effective Oct. 1.
Mobuyle will enable merchants to accept all major credit and debit cards, including corporate cards and Heartland loyalty and gift cards, via secure card swipe or manual entry. It also features electronic signature capture, GPS location capture, merchandise picture storage, and voice authorization capabilities. Merchants also may accept card payments even if they are out of range for cellular coverage or Wi-Fi access with a store-and-forward option.
"It may not be viewed as a big thing, but we are being 'green' with this because the merchants will be able to e-mail receipts to their customers and never use paper for a receipt, so we're saving trees," Elefant says.
Mobuyle is "geared toward existing infrastructure," but Heartland will be looking at mobile-phone payments and Near Field Communication capabilities in the future, Elefant says.
Industry analyst Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, says Heartland is focusing on its strength in working with small and midsize merchants.
"They are positioning it a little differently than some of the other mobile-enabled applications, but it will be helpful for merchants who want to get extra payments processed without adding a big expense during busy times in the store," Ablowitz says.
Heartland also was wise to put an extra focus on its encryption system for security and emphasizing the security measures through each facet of the sales transaction, he says.
