Tech: swipe cards and smart phones - an easy way to pay

A disclaimer; this is not a product anyone at this newspaper has yet seen working and so all we have to go on is the manufacturer's claims. But if they stack up, then CellCharge 2.0 is poised to be a leading contender in this nascent sector.

CellCharge, Inc. already has a product which performs merchant account processing by phone. But it claims that the latest version makes processing even easier

"CellCharge 2.0 is a mobile processing system that enables businesses to turn their cell phone into a mobile payment device and features not only the ability to accept credit card payments over the phone but also the ability to swipe those cards on certain smart phones" This Secure Credit Card reader is geared toward smart phones, including iPhones, iPhone3, iPhone4, iPad, Droid and Blackberry devices. This provides businesses the ability to add this feature to their current calling plan or to any of the smart phones available today.

A similar concept was launched several years ago using a modified Nokia handset and targeted taxi drivers. But the company behind it ran into a range of problems and the product has not been updated for some time - if, indeed, it is still available.

Dave Garboski, CEO of CellCharge, Inc., explains why businesses, especially small businesses, can benefit from such a product: , "Think how often someone has walked away without buying just because you didn't have the ability to accept a credit card payment. Now, think how easy it will be to just swipe those transactions right on your phone. This is Mobile-Commerce at its finest."

Mobile payments are especially beneficial for those businesses that conduct business out of the office. "For example, "on-the-go" businesses who would benefit include small businesses, massage therapists, hair stylists, flea shop sellers, artists, general contractors, electricians, service companies, landscapers, mobile vendors, trade show vendors, plumbers, taxi drivers, airport transportation, virtual assistants, etc.," says the company. And so, in more or less identical terms, do the providers of competing services which, if nothing else, shows that there is a concentration of interest which will at least create a buzz around the concept in those target markets.

Importantly, data security is effected by the simple expedient of not allowing the user of the phone to keep any customer data. The company says that CellCharge 2.0 is an end-to-end encrypted device, meaning that all data is encrypted before it leaves a cell phone. Therefore, no personal data is retained. CellCharge 2.0 is PCI compliant and provides the lowest rates on transactions with features such as real-time authorisations, emailed receipts, void and online reporting."

Subscription to the service costs USD9.99 per month but there is no equipment to buy or lease, no always-on or dial-up connection (provided the user has a data plan on his mobile phone) and there is no commitment beyond the current month.

Well, kind of. A printer is needed to produce the credit card slip for this system does, after all, have to behave like a credit card terminal in a shop. That is paid for but, provided it is returned unharmed within 30 days, a full refund is given. But if merchants prefer to e-mail the paperwork to customers, then a printer is not needed.

Claiming that there is a 98% approval rate for a merchant account, the company charges a transaction fee (3.85%) and a sone-time setup fee of USD99.00.

At the simplest level, CellCharge 2.0 "Keyed" simply requires the merchant to open an app on their Android, Blackberry or iPhone and to key in the transaction details then send. However, this creates the opportunity for error and many merchantswill prefer to use a swipe terminal.

As a back-up, a dial-up service is available that works from any touch-pad phone.

Like most innovative payment products that use a merchant account, it's available in a limited number of countries. In this case, it's only in the USA.