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Bank of America targets small businesses with mobile payments, deals services

Mobile Pay on Demand from Bank of America Merchant Services includes an attachment for a smartphone or iPad enabling users to process credit card transactions. The platform will also provide small businesses with a way to create and send deals and offers.

“The bank has a very large small business presence,” said Trevor Rubel, emerging product and strategy executive at Bank of America Merchant Services, Atlanta. “It is really about extending the reach of these customers.

“Whether a business is a Bank of America customer or not, we felt that there is an opportunity because there is a wealth of businesses that are still not accepting credit cards for a whole lot of reasons,” he said.

“With Mobile Pay on Demand, we are able to simplify the sign up process, enable businesses to accept payments wherever they are and allow them to reach out to more customers through offers.”

Bank of America Merchant Services is a joint venture of Bank of America and payment processor First Data.

Mobile POS simplified
With the growth of smartphone penetration, mobile payments and mobile banking, there is pressure on financial institutions to develop a broad array of mobile banking services in order to stay relevant to customers.

Bank of America has been a leader among financial institutions in testing mobile services, including remote deposit capture, QR-code enabled mobile payments, mobile advertising and more.

While Mobile Pay on Demand is another example, Bank of America faces some stiff competition in this area from the likes of Square, PayPal Here, Intuit and others.

However, Bank of America believes it is offering some improvements to what is currently available.

For example, the card reader has special prongs that grip onto a phone to stabilize the reader so it can get an effective swipe even on the thinnest of phones.

“We have heard from merchants again and again that their card readers are difficult to use because they have to swipe multiple times before they get a good swipe,” said Matt Morrow, product manager for Mobile Pay on Demand.

The card reader also comes with a cap to protect it and can be easily worn around the neck or put on a key ring.

Mobile marketing
The service is already being used by several thousand small and mobile merchants, including a sports team that is using it to sell t-shirts at games.

The new service will be available more broadly beginning Dec. 3. It will include a free mobile app for merchants and a free secure card reader. Instead of monthly or annual fees, merchants pay a 2.7 percent per transaction fee.

Merchants who sign up for Mobile Pay on Demand will also be able to access BankAmeriDeals and iDeals Marketing Platform Pro, giving these businesses a way to reach out to new and existing customers through promotional offers, online coupons and deals.

Through the marketing platform, businesses can publish offers and link them to a card so that customers can redeem them via the Mobile Pay on Demand solution.

Marketers can create coupons or loyalty offers that can easily be published to Facebook, a Twitter feed and partner sites.

“We got a lot of feedback from merchants that they don’t want to have to constantly train staff on how to redeem a bar code offer,” Mr. Rubel said. “This is a really safe, secure solution for the merchant that is also incredibly convenient for consumers.”

The offers can be discovered on Facebook, by someone sharing them or on a syndicated offers site.

Interested users can click on the deal, register their credit card number and when they pay at the merchant using that card, the offer is automatically redeemed, with a rebate showing up on the cardholder’s account.

“A lot of the businesses that we work with are small and Mobile Pay on Demand is a great for them because they don’t need to invest in the hardware,” said Zach Lynn, product manager for marketing and loyalty programs at Bank of America Merchant Services. “With the marketing platform, it gives them a dedicated online presence, SEO capabilities and the ability to participate in deals and loyalty programs.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York