Mophie and Intuit partner to create Complete Card Solution for iPhone, try to make Square look square
Who knew that credit card processing would be the new hotness for smartphones? The Square mobile payment system has been making waves by letting small businesses receive credit card payment directly on their smartphones.
Context & Ripple Effects
The iPhone-as-register race that VeriFone joined last December with its own iPhone card reader just gained its most software-heavy entrant: accessory maker Mophie is partnering with Intuit on the Complete Card Solution, pairing Mophie's reader hardware — which the company had already been selling as of early 2010 — with Intuit's small-business accounting muscle.
For Square, which kicked off this category by letting small businesses take cards directly on their phones, the significance is that the challenger is no longer facing gadget rivals but an incumbent that owns merchants' books. It also fits Intuit's recent buying spree around consumer and small-business finance, including the iEconomy-era deal wave that brought Mint.com into the fold in 2009.
First-order effects
- Square's first-mover advantage narrows immediately: small-business iPhone owners can now choose a bundle backed by Intuit's bookkeeping ecosystem instead of a standalone dongle-and-app.
Second-order effects
- VeriFone's December 2009 entry plus Mophie-Intuit's arrival turns the market into at least a three-way fight, pushing competitors to differentiate on software services and fee structures rather than reader hardware, which risks becoming a commodity accessory.
Third-order effects
- If established finance-software vendors keep absorbing the card-reader layer, the structural question becomes whether independent mobile-payments startups like Square survive as platforms or get squeezed between incumbent distribution and cheap generic readers.
The trend: Smartphone card acceptance is shifting from startup novelty to contested infrastructure, as accounting-software incumbents and terminal veterans bolt readers onto existing small-business relationships.