Visa is aggressively building its presence with mobile point of sale vendors in an effort to attract the merchants that still don't accept electronic payments and rely heavily on cash and checks.  

"There are more than 100 companies with mobile point of sale solutions and our plan is to work with a large number of them to provide standards and best practices," says Bill Gajda, global head of mobile product for Visa.

About 70% of U.S. merchants—or about 19 million businesses—don't accept electronic payments, according to Javelin Strategy and Research. When spending at these merchants is added together, it represents about $1.1 trillion, Javelin says.

Working with mobile point of sale companies will allow Visa to increase merchant acceptance both in the U.S. and abroad, Gajda says.

Visa added three more mobile point of sale companies on June 5, signing payments acceptance deals with iZettle, SumUp and Swiff. Visa also approved two new mobile point of sale devices from Anywhere Commerce and Miura Systems.

"We'll be able to increase acceptance points in the U.S. where there is a long tail of merchants that have taken cash and checks," Gajda says. "We're looking at merchants across the board, but you also have a major focus on the individual contractor, farmers markets, taxi drivers, etc."

The paper-only segment is starting to shrink given the growth of companies like Square, he says. Visa is an investor in Square.

"Square's growth has provided new merchants for Visa that would not have accepted cards before," Gajda says.

Mobile acceptance terminals are also becoming more widely used. From 2011 to 2012, the number of mobile point of sale terminals worldwide increased 111 percent, to 9.5 million from 4.5 million. The number of mobile terminals should reach 38 million by 2017, according to Timetric.

Outside the U.S., mobile point of sale hardware allows merchants to add card acceptance quickly and at less expense, Gajda says. Visa does not disclose acceptance figures for non-U.S. markets, though the number of merchants in emerging economies that could use mobile payments hardware is likely extensive, given the success of telecom-driven mobile money services in Africa and other markets.

Additionally, Visa's agreement with iZettle, SumUp and Swiff will also make it easier to accept Visa mobile point of sale payments in markets that use the EMV-chip card standard.

"Visa was already a player in [mobile point of sale payments], but here they are moving to make it easier to accept Visa cards through mobile point of sale solutions while doing it in a Visa-approved way," says Rick Oglesby, a senior analyst at Aite Group. "This should accelerate mobile point of sale solutions in EMV markets in the immediate to short term, and will make things easier in the U.S. a few years down the road when the EMV market becomes relevant here."

Visa is also promoting its own technology as an available service to mobile point of sale providers, Oglesby says. "All mobile point of sale providers need payment gateway solutions, and Visa's ownership of [electronic payment processor] CyberSource gives them a key asset to attract direct relationships," he says.

In November 2012, rival card network MasterCard introduced the MasterCard Mobile POS program to provide guidance to mobile payment vendors and promote simple and secure transactions when consumer use debit, credit and prepaid cards to pay merchants that use these devices, said Brian Gendron, a MasterCard spokesman, in an email.

To date, the following mobile point of sale tech providers have successfully completed MasterCard's registration and self-certification process: CHARGE Anywhere, Corduro, Elavon, Ezetap, Handpoint, Itos, iVeri, iZettle, JSC Smartfin (2Can), Miura Systems, MRL Posnet, NetSecure Payments (Kudos), Payleven, Payworks, ROAM, SCCP (Swiff), Soft Space, Square, SumUp and Thyron Systems.

"As these mobile point of sale solutions expand, particularly as you see these new 'register' type solutions that are more advanced and that target tier one and tier two merchants, the tech will be a more significant part of the market," says David Kaminsky, a senior analyst at Mercator Advisory Group. "Visa and MasterCard will want to have an increasing amount of control and influence [as] the mobile point of sale market develops."

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