Startups like Square and PhoneSwipe spotted a lucrative opportunity to empower the smallest of merchants to accept credit card payments, and they've made the most of it. If you have a product or service to sell, all you need to get paid by credit card is a smartphone or tablet, a tiny card swiper, and an account with one of these vendors.
Tomorrow, those companies will gain a significant competitor when VeriFone launches SAIL, a mobile payment-processing platform for small and medium-size businesses.
Similar to the programs that Square and PhoneSwipe offer, merchants who sign up with VeriFone's SAIL program will get a free credit card reader that they can plug into their Apple or Android smartphone or tablet, and a free app for processing credit card transactions. The merchant will pay a 2.7 percent fee for each swiped transaction, which is comparable to the other services (Square charges 2.75 percent; PhoneSwipe, 2.69 percent); but VeriFone will also provide its customers the option of paying a $9.95-per-month subscription fee in exchange for a discounted transaction fee of 1.95 percent.
Existing VeriFone customers can also integrate SAIL into their current operations, tying the mobile app to their countertop equipment so they can also accept tap-and-pay cards and near-field communication (NFC) services such as Google Wallet. These features could render SAIL more attractive to larger businesses with storefront operations and/or higher volumes of transactions.
But the feature most likely to set VeriFone's SAIL service apart from the competition is its software development kit (SDK), which can tie its payment-processing service into third-party marketing, customer-relationship management (CRM), and customer loyalty programs, as well as social media tools such as Facebook, Twitter, and Yelp. With the customer's permission, the merchant will be able to send a customized, interactive receipt to the customer's email address, too (Square and PhoneSwipe also support email receipts).
The emailed receipt, besides providing the customer with a convenient proof of payment, could also include a note and a link encouraging the customer to post a review of the business on Yelp, or to "like" the merchant's Facebook fan page. This puts the merchant's name in front of the customer's social contacts, potentially generating new business.
Once the merchant has the customer's email address, they can send them special offers, inform them of upcoming sales or events, offer to enroll them in a loyalty program, and more. What might otherwise have been a one-time transaction becomes an ongoing relationship and an opportunity to gain entirely new customers. The SAIL mobile app is also capable of reading barcodes, which will make it easy for merchants to redeem coupons and fulfill other types of offers.
The SAIL app for iOS devices will be available for download from the Apple App Store tomorrow. An Android version will be available later this month. Merchants who sign up for the service (by providing their contact information, Social Security number, and a bank account) will be able to accept payments via American Express, Discover, MasterCard, and Visa almost immediately (following a "soft" credit inquiry that doesn't affect an individual's credit score).