Saturday, July 14, 2012

A Smart Phone Now Becomes A Card Swiping Device

Ever wish you could use your credit card when a delivery boy rings your door bell?
The day is not so far away....


Earlier this year there was a buzz about PayMate launching a smart phone app (PayPOS) designed for merchants (retail shop keeper, home delivery boys, small shops, provision stores etc.). Here, the end customer would be asked to feed his/her plastic card details into this app on merchant's smart phone for paying bills.


However, in a country obsessed with security concerns it would not be a good idea to key in your credit card number and security code into delivery boy's smart phone.


Contrarily, MTS has come up with a better solution to this. MTS has launched a dongle which has a card swiping section and could be attached to smart phone's 3.5mm audio jack. Actually, this is new to us but not for rest of the world. This technology of using smart phone as a card swiping device is known as mPOS.


mPOS a.k.a. mobile Point Of Sale consists of a smart phone, an smart app and a pluggable card swiping dongle.


There is a well known Android app known as Square Card Reader which is doing the same in US for quite some time now. Square's one square inch dongle when plugged into a smart phone becomes quite efficient in replacing the shoe sized card swiping machine at merchant's shop.


How is MTS mPOS going to work in India?

  • Merchants who want to give up their old and immobile card swiping machine must download the mPOS application on MTS smart phone. Then register themselves as merchants and provide necessary details.
  • Once merchant is registered he can plug-in the MTS mPOS dongle into 3.5 mm audio jack of MTS smart phone and start swiping customer's credit/debit cards for payments. 
  • A customer can cross check the amount on phone's screen and authorize the transaction by signing on phone's screen. 
  • For every successful/unsuccessful transaction a e-mail/sms will be sent to customer. This would complete the transaction.

MTS mPOS bundle (MTS MTag 3.1 CDMA smart phone, mPOS 3.5mm jack dongle & one year Data plan) is expected to cost around Rs 4000. MTS estimates monthly data charges to be between Rs 200 to Rs 300. This makes MTS mPOS a serious competitor to classical credit card swiping machine which costs almost Rs 15,000 for one time setup.




Currently MTS mPOS is in pilot phase. This service will be used by giant online retailer Flipkart.com to allow its customer to pay through their credit card on home delivery.