Bank of America Tuesday announced Mobile Pay on Demand, an mPOS product for the bank’s Merchant Services customers. Square, the most high profile company in the market, is processing $8 billion annually. This has inspired a number of competing products from the likes of PayPal, Groupon, Intuit, and more. BofA is following in the footsteps of these organizations, introducing a solution modeled closely after Square’s.
BofA will provided the card reader for free, but merchants will a pay 2.7 percent-transaction fee. The bank guarantees next-day access to funds, customer service representatives available by phone, and, unlike Square, establishes retailers using the service as the merchant of record. As an incentive, merchants who sign up by the end of the year receive a one-year subscription to BofA’s deals marketing platform.
From All Things D:
Trevor Rubel, EVP of Strategy and Emerging Products for Bank of America Merchant Services, says he believes that Bank of America has an advantage over the others because it has a very strong, trusted brand. Plus, it already has substantial relationships with retailers, including roughly two million small- to mid-sized businesses that don’t currently use its payment terminals because they don’t process enough transactions to justify it or because they work on the go.
The mPOS market is currently experiencing an influx of products. Square has displayed the potential for success in the market, the cost of providing a solution is minimal, and others want in. We can expect this to continue for the next few months. At that point, the market will saturate, new business will dry up, and only the best handful of solutions will be left standing.
Ultimately, which solutions remain will be determined by how much value they are able to add on top of basic card acceptance. For example, Intuit couples payment acceptance with its Quickbooks business management software, automatically entering all transactions into the merchant’s database for easy management. Bank of America is primarily offering a trusted brand name and a short distance from a merchant’s payment acceptance to their merchant account. Whether that is enough to withstand the barrage of solutions both currently in existence and soon to be introduced has yet to be determined.
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