May 07, 2012, 9:31 PM — Startups like Square and PhoneSwipe spotted a lucrative opportunity to empower the smallest of merchants to accept credit card payments, and they've made the most of it. If you have a product or service to sell, all you need to get paid by credit card is a smartphone or tablet, a tiny card swiper, and an account with one of these vendors.
Tomorrow, those companies will gain a significant competitor when VeriFone launches SAIL, a mobile payment-processing platform for small and medium-size businesses.
Similar to the programs that Square and PhoneSwipe offer, merchants who sign up with VeriFone's SAIL program will get a free credit card reader that they can plug into their Apple or Android smartphone or tablet, and a free app for processing credit card transactions. The merchant will pay a 2.7% fee for each swiped transaction, which is comparable to the other services (Square charges 2.75%; PhoneSwipe, 2.69%); but VeriFone will also provide its customers the option of paying a $9.95-per-month subscription fee in exchange for a discounted transaction fee of 1.95%.
Existing VeriFone customers can also integrate SAIL into their current operations, tying the mobile app to their countertop equipment so they can also accept tap-and-pay cards and near-field communication (NFC) services such as Google Wallet. These features could render SAIL more attractive to larger businesses with storefront operations and/or higher volumes of transactions.
But the feature most likely to set VeriFone's SAIL service apart from the competition is its software development kit (SDK), which can tie its payment-processing service into third-party marketing, customer-relationship management (CRM), and customer loyalty programs, as well as social media tools such as Facebook, Twitter, and Yelp. With the customer's permission, the merchant will be able to send a customized, interactive receipt to the customer's email address, too (Square and PhoneSwipe also support email receipts).
The emailed receipt, besides providing the customer with a convenient proof of payment, could also include a note and a link encouraging the customer to post a review of the business on Yelp, or to "like" the merchant's Facebook fan page. This puts the merchant's name in front of the customer's social contacts, potentially generating new business.