Apriva, AT&T Help SMBs Accept Payments on Mobile Phones

Monday Aug 2nd 2010 by Stuart J. Johnston
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As businesses become more mobile, small businesses especially need to provide services that customers expect, such as paying with a credit or debit card, without a lot of hassle.

It's not uncommon for small businesses and mobile professionals to need to have a way to take a credit or debit card for payment on the spot -- right there, in the field. No one wants to haul around a credit-card processing machine, so why not use mobile devices SMB owners already have -- smartphones.

It's not only more convenient for the small business person, but also for the customer.

Now, AT&T (NYSE: T) and mobile payment company, Apriva, have begun providing services and technologies, called AprivaPay from AT&T, that turn any supported AT&T Web-enabled mobile phone into a point-of-sale terminal, either with or without a card swiper and a receipt printer.

Market for Mobile Device Commerce

You don't typically think of your smartphone as a point-of-sale terminal, although it's a market that more operators and service providers are embracing -- and there appears to be market demand, particularly from small businesses, for such products.

"Small and medium-sized businesses are doing sales, deliveries, and services in the field [but] we didn't have a tool that would let users take payment in the field," Igor Glubochansky, executive director of mobility marketing for AT&T, told Small Business Computing.

It's not just a case of providing convenience for customers. There are advantages to small businesses as well, he said.

"They [small business persons] can accelerate their revenue cycles and be more productive in the field," Glubochansky said.

One analyst who covers telecommunications strategy agrees.

"It allows small businesses to take mobile payments immediately ... it could be a handyman, a plumber, or even a hairdresser. If customers want to make a purchase over the phone, they can take payment over the phone," Kneko Burney, president and chief strategist at mobile analysis firm Compass Intelligence, told Small Business Computing.

To get started, the small business needs a compatible phone and a merchant account.

The offerings come in two flavors: AprivaPay is the Web-based version and AprivaPay Professional, a slightly higher-end offering, which has its own software client that you download to the phone and run from there. AprivaPay, the lower-end product, requires you to key in credit and debit card numbers by hand via the browser. With AprivaPay Professional you can buy an optional card swiper and a receipt printer that connect to the phone via bluetooth.

Of course, AT&T is not the only -- or even the first -- wireless operator to offer smartphone-based card transaction services for small businesses. For Instance, Sprint (NYSE: S) and its partner, Aircharge, offer a similar service for smartphone customers on the Sprint network.

The Cost of Mobile Payments

An AprivaPay subscription starts at $14.95 per month, while AprivaPay Professional begins at $19.95 per month.

AprivaPay from AT&T runs on most supported smartphones, which means that they need to run a Web browser. According to AT&T statements online, if the phone comes with a browser and a data account, and it's an AT&T supported phone, it's likely to work with AprivaPay -- including Apple (NASDAQ: AAPL) iPhone and RIM (NASDAQ: RIMM) BlackBerry.

Meanwhile, AprivaPay Professional is currently only available on phones running Microsoft (NASDAQ: MSFT) Windows Mobile Standard and Professional. However, Apriva says it's working on providing clients for iPhone, RIM Blackberry, Google Android and J2ME "soon," according to its site.

No Signal? No Problem

One additional feature that AprivaPay Professional provides lets the software still function when no carrier signal is present. Instead, it saves transactions in the phone and then handles authorizations when service returns, according to statements on Apriva's site.

Analyst Burney said that the combination of an innovative smaller company like Apriva with a large established operator like AT&T could turn out to be an equalizer for small businesses.

"It puts small business on a more even playing field with bigger companies. If you're a single-person business, it freezes you out of the market [if you don't have the capability]. People want to pay with credit cards," Burney said.

There's large potential for AT&T in a not-niche-anymore market, Glubochansky said.

AT&T's statement quoted a Generator Research study claiming that the global mobile payments arena will be worth more than $600 billion within five years. The survey claimed that market was $68 billion in 2009.

If it proves out, that would be a growth rate of more than 50 percent through 2014 -- it also may be an indicator of how technology can give a small business as much or more agility than its competitors.

That also spells a huge opportunity for AT&T, of course.

"It's part of a broader strategy to become more relevant to small businesses, [and] it's definitely a step in the right direction," Burney said. "It won't change the world, but it starts the dialogue about what else AT&T offers."

Stuart J. Johnston is a contributing writer at http://www.internetnews.com">InternetNews.com, the news service of http://www.internet.com">Internet.com, the network for technology professionals. Follow him on Twitter @stuartj1000.

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