Before the mobile card reader phenomenon took off, it was unlikely that a small-business owner could walk into a nearby store, pay $10 and walk out minutes later with the ability to accept card payments. Today, mobile payment devices are competing for shelf space with a growing number of major retailers.

The trend is gaining momentum. Over the past two weeks, PayAnywhere announced that its mobile card readers are available at Sam's Club stores and online at Amazon.com. Its other retail partners include Home Depot.

"The national massive retail launch for us was important to communicate the brand," says Marc Gardner, founder and CEO of PayAnywhere.

These devices typically link to phones via a port or Bluetooth connection. They allow users to swipe payment cards and approve the transaction over the phone's data connection. Some systems allow cards to be read with a phone's camera; others read EMV-chip cards for use outside the U.S. 

Many vendors of mobile card readers first considered the retail sales channel after early entrants, including Square and VeriFone, began offering their card readers in Apple stores.

This move "turned some light bulbs on," says Aaron McPherson, practice director for payments and security at IDC Financial Insights. "You want to get as wide a distribution as possible; making card readers easy to get is key."

Wholesale stores, such as Sam's Club, are more likely to serve small-business owners and wealthier shoppers, he says. Small-business owners are the primary audience for these devices.

Card readers might also be useful for medical professionals that could capture co-pays on the spot, McPherson says. Churches, community organizers and political volunteers can use them to accept donations, he says.

Another advantage of providing card readers in retail stores is the lower cost compared to mailing the readers, which was Square's original method of distribution, he says. By shipping boxes of the devices to retailers, mobile POS companies cut their distribution expense.

After Apple, Square began offering its reader through other retailers including Target, Best Buy, FedEx and Staples. Square says its reader is sold in 30,000 retail locations today.

"Neighborhood retail locations are an important resource for small-business owners to discover new opportunities and technologies that can help them grow," says Lindsay Wiese, a spokeswoman for Square.

For new customers, it is important to have a way to obtain the reader right away, she says.

"I've talked to a few artists who have discovered Square while selling at an event, gone out that night to pick up a Square card reader, and started accepting credit cards the next day," Wiese says.

Intuit's GoPayment is sold in Verizon retail stores. Groupon does not offer its reader through retailers, though it also does not offer it through conventional channels such as independent sales organizations. Groupon's approach allows it to offer lower transaction rates by eliminating some of its distribution costs, the company says. 

Fiserv Inc. also chose not to work with retailers for distribution. It offers its mobile card reader, SpotPay, only through banks. 

"As we're watching the pace of non-financial institution innovation we see the demand is there," says Dave Keenan, general manager of Fiserv's network solutions. "It's the unique position for financial institutions; they need to be at the center of this so the payment system as a whole keeps integrity."

Many people take the safety and security of the payments system for granted, Keenan says. Banks can offer assurances to end users about the security of each payment, he says.

"Non-financial institution [players] simply don't have that protection in mind for payers and payees," he says. "In the non-financial institution environment, it can be a lot like the wild, wild west." 

Bank of America offers its own mobile card reader, called Mobile Pay on Demand, through its Bank of America Merchant services joint venture with First Data. 

More banks will start offering mobile card readers next year, McPherson predicts.

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