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Total System Services Inc. has launched an application that enables merchants to accept card payments through smart phones.

The tool, called MobilePASS, is designed for drivers, plumbers, pizza delivery people and other merchants who do not work in offices and stores, and who accept relatively low volumes of transactions, said Ashim Banerjee, the chief information officer for the Columbus, Ga., processor's Acquiring Solutions unit.

Merchants can download the application for free, but must pay a setup fee to use it; Banerjee would not provide details about the fee structure, which he said would vary depending on the features users choose and whether individual merchants negotiate any specific arrangements.

TSYS also hopes to sell the application to what Banerjee called "consumer merchants"— for instance, people who are having garage sales. Consumers would rent a merchant ID from TSYS to accept card payments, and could direct those payments to accounts at eBay Inc.'s PayPal Inc. unit or similar accounts, he said; several acquirers have expressed interest in offering such a service.

James Van Dyke, the founder and president of Javelin Strategy and Research, expressed doubts that such a capability would be a good fit for garage sales. "It's a bit of a stretch," he said. "People running garage sales are not professionals [and] everyone expects to carry cash when you are going to a garage sale."

Still, he added, the mobile tool is "a pretty big deal. When you take a big payments network like TSYS, and an [application] that is tailor-made for the masses, then you are removing some of the barriers for mobile payments."

TSYS is not the first company to offer card acceptance tools for mobile phones. Van Dyke recalled a scuba vacation about four years ago when he wanted to upgrade his diving gear but had no cash. The diving company employee pulled out a Treo smart phone "with a bulging device on the back of it with a card swipe," he said.

Other companies provide similar capabilities. Smart Transaction Systems Inc., for instance, earlier this year introduced a tool that enables mobile merchants such as vendors at farmers' markets to process gift and loyalty cards through text messages.

And Way Systems Inc. of Woburn, Mass., sells mobile wireless terminals for merchants that are often on the go.

One of the potential challenges of mobile acceptance is security risk, Van Dyke said. "People who claim to be a merchant who are not a merchant can get card info. Hopefully TSYS has the right methods in place."

Though the application was designed for magnetic stripe cards in the United States, Banerjee said TSYS expects to release a different version for other markets.

"We do have in the works a chip-and-PIN/EMV [version]," he said, referring to the antifraud standard for chip cards found in most major countries outside the United States, Banerjee said, though the processor has no firm date for launching it.

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