MANILA, Philippines — Online sellers looking to accept credit cards as a mode of payment for goods and services now have another option with a new device being tested out by telecom giant Smart Communications, Inc.
Smart is currently testing out a mobile credit card reader similar to the popular Square device in the U.S., which acts as a point-of-sale (POS) credit card terminal that is attached to a smartphone.
Put up by Twitter co-founder Jack Dorsey, Square revolutionized mobile payments in the US by allowing virtually anyone with a smartphone to accept credit card payments for any type of good or service.
Online sellers are among those who stand to benefit from Smart’s new venture, in cooperation with subsidiary Smart Hub, Inc. (SHI), as it fits perfectly into the e-Commerce environment in the Philippines.
According to a 2011 study by Yahoo! Philippines and market research firm Nielsen, the local e-Commerce sector is characterized by “shop online, pay and pick up offline” behavior of customers, as there remains to be an “inherent reluctance” in transacting online.
With the device, online merchants could receive purchase requests online and agree to meet up with customers for pick up of items offline, where they can use the mobile card reader to process the buyer’s credit card payment.
“The pioneering solution will allow sellers and professionals like doctors and lawyers to accept credit card payments outside their offices–in bazaars, trade shows, and even in their clients’ homes,” Smart said.
“At the end of the day, they can check all the completed transactions using their smartphone,” the telco added.
Smart did a pilot run of the new mobile POS device during a recent promotional event at Shangri-La mall in September, with customers swiping their credit cards using the device attached on an iPhone. It is unclear, however, which mobile platforms the device would be compatible with.
The telco, however, faces a tough challenge in promoting adoption of the new device, as only about 7 million credit cards–or less than 10 percent of the entire population–are in use in the Philippines as of 2011.
The mobile POS solution is an offshoot of SHI’s recent acquisition of a MasterCard license, which allows it to accept and process MasterCard transactions.
SHI is the first non-bank institution in the Philippines to receive such an authorization from the global financial services giant. This means, however, that Smart’s new venture could only process MasterCard transactions.
Those interested in the Mobile POS solution may inquire by sending an email to SmartMerchants@smart.com.ph, Smart said.