Square seems to be wearing a big bull's-eye, given the number of firms that are bearing in on its mobile swipe pay model.

Billhighway, a 13-year-old Troy, Mich.-based firm that offers accounting, cash management and payment processing to nonprofit firms, plans to join the fray with a mobile payment option of its own. The company will outfit clients with a device that attaches to a smartphone to receive donations.

The use case is similar to that of Square — staff working on behalf of a fundraising organization can reach people who are attending a live event and accept card donations on the spot. Billhighway's new app was built by a mix of processing technology developed internally by Billhighway and by Detroit Labs, a mobile application design and development firm that has designed apps for automakers.

The mobile devices will collect payments and route them to Billhighway's processing engine, which is delivered to clients via the web, allowing for minimal upfront tech development or cost. Billhighway makes money by collecting a fee in exchange for processing the transaction. It didn't disclose the size of the fee (rival Square collects less than 3% per transaction).

"We're looking at how we can enable organizations to raise money anywhere," says Vincent Thomas, CEO and founder of Billhighway.

Thomas says the app works three ways. Donors can swipe their payment cards through the readers, use the camera on the smartphone to snap a picture of the payment card, or type the information from the card into the mobile device.

The firm currently has 27 different pilots in progress, and plans to partner with Easter Seals for that charity's Walk-a-Thon program. Billhighway's mix of clients includes mostly nonprofits, higher education institutions, youth organizations, faith-based charities, and business associations.

In offering mobile phones as a payment acceptance device, Billhighway in a very crowded field, but also a very hot one. Its competitors include Square, Pay Anywhere, and eBay subsidiary PayPal. Fiserv also this week launched a mobile-payment product to be offered directly though financial institutions.

Billhighway is attempting to separate itself from the pack by focusing on non-profits.

"We find a lot of the payments technology out there today is built for the profit world," Thomas says.

While Square and Pay Anywhere have both positioned their products as amenable to nonprofit fundraising, Billhighway hopes its singular focus and history in the nonprofit sector would give it a leg up on other firms, since the firm contends its processing technology doesn't have to be reconfigured for charitable giving. Thomas did not address the possibility of offering Billhighway's mobile collections app through financial institutions.

Square didn't return requests for comment by deadline. PayAnywhere CIO Tracy Metzger says the firm's app can be configured to accept cash and credit card donations and keep track of demographic information of the donor by using the customer field manager of the application so non-profits can keep track of who has donated and how they have donated. Metzger says nonprofits sign up for a free PayAnywhere merchant account to get started.

"For larger, more customized implementations, nonprofits work with PayAnywhere to leverage our application programming interface to add the ability to accept and process payments on the go, via a mobile device, into the apps or websites that the non-profit uses in the field to collect donations."

Metzger also says other elements of PayAnywhere's service can also be applied to nonprofits. For example, the heat map feature, which shows merchants a visual picture of where the majority of their transactions are taking place, can be used by nonprofits to target activities.

The service's customizable receipts, which are a standard part of the app can be customized with a nonprofit's logo, website, tax ID, and at the end of the transition the receipt is delivered electronically to the donor. "This allows the non-profit to further promote their cause, and gives the person making the donation a clear and easy way to track and record their donation," Metzger says.

The differences between non-profit donations and for-profit payments include reporting and classification of cash flow to comply with tax exemption rules and other regulations governing how non-profit institutions can collect and manage cash.

Thomas says there are a number of other differences in processing payments between profit and nonprofit sectors, including language, managing and tracking the success of fundraising campaigns, building the reports on donations that are sent to a nonprofit's boards of directors.

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