VeriFone is making good on its original promise to open up its Square-like mobile card reader, Sail, to developers.  

This move gives merchants the ability to integrate mobile payments with their existing point of sale systems. VeriFone's new portal — a website where a coder can find registration keys and software packages that integrate into VeriFone's network — lets programmers create new mobile applications on top of VeriFone's infrastructure.

"This opens up the market," says Brian Hamilton, VeriFone's vice president of its recently created SMB Commerce group. "It broadens the scope."

Like Square's popular card reader, VeriFone's device is meant to enable mobile devices such as smartphones to accept card payments through a simple plug-and-play process. VeriFone announced several software developers today that have been working with an early version of the Sail open platform.

Among them is tablet point of sale software maker Lavu. The Albuquerque company is using Sail's merchant enrollment and payment application programming interfaces with its iPad software for restaurants.

"This is going to open up the doors" for Sail, says Ben Harrison, Lavu's senior vice president of marketing. "It's not just to smaller businesses … but also medium-size restaurants and even chains."

Lavu has also been contacted by PayPal, but hasn't yet begun integrating PayPal's ecommerce platform with its POS software, says Harrison.

Indeed, few others have opened up their mobile payment software to outsiders.

That could be an important point of differentiation for VeriFone, says Brian Riley, a senior research director in the bank cards practice at CEB TowerGroup

"In order to protect their franchise they really need to have a play in the [open software development] space," he says. "If you look at how PayPal launched their developer portal ... they really went out and embraced the community, and that's not been a channel that I think VeriFone has addressed aggressively before."

No doubt, having an open platform is important for attracting merchants, says Jim Van Dyke, president and founder of Javelin Strategy & Research.

"It's the same as the Microsoft vs. Apple approach, where Microsoft attracts more techies from companies who want to create a more uniquely seamless experience for shoppers," he says.

Cloud payment platform company Spreedly's chief executive Justin Benson echoed that sentiment.

"Does [VeriFone] Sail now [equal] Android and Windows and Square [equal] Mac?" he says. "Square seems utterly focused on making the technology disappear into the background as far as possible and just focus on the user experience."

Benson says he's considering integrating Sail into his company's software, which consolidates access to many different payment gateways, such as Authorize.Net and PayPal, into a single payment program.

"[But] I think this muddies the water between POS, mobile and online," he says. "The question we have is 'How many businesses have purely mobile-only transactions, how many have a blend of field, mobile [plus] in store [plus] online, [and] for the second category, is this really viable or will they look for their existing payment provider to help them manage this field/mobile based sales?' "

This open platform also provides another important point of differentiation between Sail and an earlier VeriFone product, PayWare Mobile, which the vendor still sells to merchants through acquirers who aren't focused at targeting micro-merchants.

This open platform also gives programmers the ability to write special code into their software that will allow even casual credit card acceptors to begin taking advantage of merchant loyalty perks offered by companies such as American Express and others, says Hamilton.

"So if you look at Amex or MasterCard, they are doing things that require card networks to recognize and reconcile down to the individual merchant," he says.

Hamilton says VeriFone's new software is able to underwrite these micro-merchants, and provide them with a "full-fledged merchant account."

That means that the card associations will now recognize when a transaction is routed through one of these super-small merchants, potentially allowing a retailer to buy in to a credit card company service that steers repeat customers back to that seller — an important perk. 

In the future, Sail will start to move beyond payments, says Hamilton.

"Our goal is not just completing the payment, but the other stuff that goes around the customer — your accounting and your inventory," he says. "The idea is to have a comprehensive and cohesive suite of products that is really adding value at the point of sale around commerce."

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