The smartphone accessory lets anyone turn their handset into a credit card reader, but T-Mobile is pitching the add-on to small businesses.
Square already offers the reader through its website, as well as in Apple Inc. (Nasdaq: AAPL), Best Buy and Target stores, but T-Mobile is the first wireless operator to get on board.
Why this matters
T-Mobile is part of the Isis joint venture with AT&T Inc. (NYSE: T), Verizon Wireless and a number of credit card companies and banks, but it's clearly seeing the opportunity in this faster-moving startup. Square has already signed up more than 1 million merchants to its payment platform, and many of them are already using the accessory to accept credit cards. (See Leading Lights Finalists: Private Company of the Year .)
Square doesn't necessarily conflict with Isis's mobile payments plans, which rely on Near-Field Communications (NFC) for smartphone-enabled contactless payments, but the startup is definitely a competitor to the wireless operators in that it cuts them out of the transaction process. Square offers the reader for free, but takes a 2.75 percent cut of each transaction. T-Mobile didn't divulge its financial relationship with the startup, but the carrier is hoping to use the payment reader to raise the profile of all its enterprise offerings for SMBs.
Read up on how mobile payments are on their way to the mainstream.
- Retail Gets Mobilized
- NFC to Come Standard in Sprint LTE Phones
- Making Money on Mobile Money
- Trends for 2012: Mobile Payments
- Near-Field Inches Nearer
— Sarah Reedy, Senior Reporter, Light Reading Mobile