VeriFone Systems Inc. is developing a bigger mobile card reader for bigger merchants.
Its reader for tablets, announced Wednesday but not available until next year, is meant to serve a different market than its reader for smartphones. Smaller readers are typically intended as a substitute for a point of sale terminal for micro-merchants.
"This version [of the tablet swipe reader] is very finely tuned for national retailers," Paul Rasori, VeriFone's senior vice president of global marketing, says.
The VeriFone device fits around the edges of a tablet and has a card swiper on one side, Rasori says. The device covers the entire back of the tablet. The reader has a built-in LCD screen, keypad and bar-code reader. Rasori says those features allow the product to become a mobile cash register or an inventory-control device.
VeriFone's strategy to tackle national retailers differs from that of relative newcomer Square Inc., which is aiming its mobile-payment device at gardeners, plumbers and pizza-delivery workers, analyst Todd Ablowitz, president of Double Diamond Group LLC, says.
By nearly encapsulating the tablet, VeriFone has "ruggedized" the device, an important consideration because "store clerks may not have much pride of ownership" in the hardware, Rasori says.
Rasori says VeriFone has been working with dozens of large national retailers on the product and has found a high level of interest in it. He would not name those retailers.
VeriFone's emphasis on large merchants and Square's focus on very small ones leaves plenty of territory in between for other vendors, Ablowitz says. "A couple of players tend not to dominate such an enormous and local market," he says.
Independent sales organizations have established relationships with the great masses of midsize retailers that would help them spread the use of mobile card readers, he says.
However, ISOs have few footholds in the loftiest levels of retailing because national retailers typically deal directly with banks, skipping the intermediary ISO layer, Ablowitz says.
Large retailers favor mobile devices for their "line-busting" qualities.
Nordstrom recently bought 5,000 Apple Inc. iPod Touch devices, and associates have praised the freedom they provide to look up information while talking to a customer instead of having to return to a terminal to check inventory or shipping dates, Ablowitz says.
Rasori declined to verify whether VeriFone has shipped iPods to Nordstrom but did say the company has shipped such devices to some retailers.
"VeriFone is wisely realizing the nature of retailing is changing," says Ablowitz. "Tablets change way retailers set up the shopping experience and the payments experience."
