Heartland Payment Systems Inc. now has a new take on just how popular Apple Inc.’s iOS devices are.

When Heartland launched its mobile-payment acceptance platform Mobuyle in August, it was compatible only with Android devices, so the application was available only at the Android Market. Merchants now may also download the app from Apple’s App Store and plug a Mobuyle Encrypting Card Reader into the earplug jack of iPhones, iPads and iPod Touches (see story).

 “We thought that for the business user Android would be more popular, and to be honest with you, we’ve been really surprised,” Michael English, Heartland executive director of product development, tells PaymentsSource. “We were doing fairly well in terms of numbers with Android sales, but when we released the iOS, things really jumped.”

Heartland will stay with two platforms for now, with an eye on making Mobuyle compatible with Research in Motion Ltd.’s Blackberry and Microsoft Windows if there is demand, English says.

Mobuyle accepts all major credit and debit cards, as well as Heartland Gift Marketing’s loyalty and gift cards, by swipe or manual entry. Merchants may use Mobuyle for off-premise transactions or for “line-busting,” where staff on the floor accepts payments away from the traditional checkout areas during busier periods.

A Heartland merchant may use Mobuyle after downloading the free Mobuyle app and ordering a card reader. The service manager sends the merchant a terminal identification code and credentials, after which the merchant needs only to integrate the standalone Mobuyle into its point-of-sale system for record-keeping and inventory.

The reader costs Heartland approximately $60 to $70, so the price to the merchant is dependent only on service-manager markup, English says. English estimates that 85% of Mobuyle users also will use the required card reader.

Heartland follows an interchange-plus pricing model, passing card brand interchange fees directly through to the merchant and charging processing fees separately. Because Heartland is a service provider, merchants save on third-party provider fees.

Mobuyle converts the card data into random characters using Advanced Encryption Standard encryption. The Android or Apple device does not store the data because the information is encrypted throughout the transaction process.

Mobuyle also features electronic signature capture, GPS location capture, merchandise picture storage, and voice-authorization capabilities. It also lets merchants accept card payments even if they are out of range for cellular coverage or WiFi access by storing the transaction data and forwarding the information later to the processor.

Rick Oglesby, senior analyst with Boston-based Aite Group, says it may not be long before applications like Mobuyle are considered mainstream. But for now, processors are determining how to make it work within a retailer’s greater infrastructure and consumer experience.

“I’d say it’s going to be a couple years,” he says. “We’re going to see very, very rapid growth. We’re seeing just about all the major merchants are experimenting with this.”


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