Will VeriFone "SAIL" past its mobile payments competitors?

Will VeriFone "SAIL" past its mobile payments competitors?

For the past couple years, intrepid mobile payment startups have been encroaching on traditional payment terminal makers' territory. Now, payment terminal company VeriFone is striking back at the competition with a new payments platform called SAIL.

Playing catch-up
With SAIL, VeriFone is targeting small businesses that might otherwise move toward competitors like Square. Square (and other products like it, including the PayPal Here) offer small merchants an advantage over traditional payment terminals -- the ability to plug in a small card reader into a phone and avoid getting a payment terminal altogether.

When Square launched in 2009, VeriFone tried to keep up with its own mobile phone plugin, called PayWare Mobile. Now, with SAIL, it's hoping to provide small, tech-savvy merchants with something even more flexible. SAIL will be offered with open-source software that that allows third party developers to build onto it -- which means that merchants can more easily mesh it with their inventory software, loyalty programs and third-party apps. That ability to tailor SAIL is what sets it apart from the competition, VeriFone told PaymentsSource in a May 7, 2012 article.

Strength in numbers
SAIL's success wouldn't be entirely due to any particular innovation that VeriFone is bringing to the market. The service, like others, is designed to allow merchants to accept payments from any location via an app and a plug-in card reader, much like Square.

What could give VeriFone's SAIL platform a big advantage, however, is the fact that VeriFone has a long history with many merchants. It's been in business for 30 years and has about 60 percent to 65 percent of the small business point-of-sale equipment market, Jennifer Miles, an executive vice president at VeriFone Systems, told Bloomberg Television.

Businesses that already have a relationship with VeriFone may be more likely to choose their services for mobile payments instead of going with a company like Square, which is unfamiliar to them. According to an April 2012 survey from Yankee Group, VeriFone was the second most popular choice when merchants were asked which vendor's mobile payment solutions they were using or planning to use in the future:

• Intuit (45 percent)
• VeriFone (32 percent)
• Square (21 percent)
• Hypercom (18 percent)
• Magtek (14 percent)
• Other (2 percent)
• Unsure/don't know (16 percent)

So while there's not much to distinguish SAIL from other services, merchants' familiarity and comfort with VeriFone does seem to be giving the new service an immediate advantage that could be difficult for other mobile payment providers to overcome. Moreover, because of the sheer volume of VeriFone's business, it may be more likely to offer reduced transaction fees that smaller start-ups might not be able to compete with.

SAIL basics|
The SAIL mobile payment system seems to be closely modeled on competitor Square's. In fact, VeriFone recently came under fire because it apparently copied some portions of its SAIL user agreement directly from Square's agreement. Verifone has since removed those sections.

According to VeriFone, SAIL's key features include:

• A dashboard that provides detailed reporting of each transaction and bank deposit, as well as inventory management tools.
• Bar code scanning technology in the SAIL mobile app for quicker checkout.
• A secure payment gateway that provides end-to-end encryption and real time merchant fraud screening.

The SAIL card reader and app are currently available for Apple devices (iPhone, iPod and iPad), and VeriFone expects the reader and app will be ready for the Android market by summer. VeriFone says that SAIL can also be integrated into its traditional countertop point-of-sale devices.

Any merchant can sign up for SAIL, and there are two pricing options:

SAIL Pro Plan (intended for merchants with a larger volume of sales):

• $9.95 monthly fee
• 1.95 percent Swipe rate
• 2.95 percent Key rate
• 2.95 percent AMEX key rate
• 2.95 percent AMEX swipe rate

SAIL Go Plan (for merchants with a smaller volume of sales):

• No monthly fee
• 2.70 percent Swipe Rate
• 3.70 percent Key Rate
• 3.70 percent AMEX Key Rate
• 3.70 percent AMEX Swipe Rate

See related: Mobile payments roundup: 5 apps to watch, Are the security concerns over Square's mobile payment device valid?

Published: May 23,2023