The potential limitation of Verifone's PayWare Mobile

Verifone's PaywareMobile seems like a great idea. The first question that I had, of course, was whether it works on an iPod Touch. It doesn't. And there's a reason.

In finally getting to someone at a Verifone reseller, I was able to determine that the PayWare mobile application, which takes the data from the swipe unit and transmits it to Verifone actually initiates a call using the voice network -- no GSM chip, no cellular call, so no iPod Touch. Supposedly Verifone is working on a newer version that should be available in the next 6-12 months that uses either cellular or wifi data.

Here's the pricing reality:

• iPhone at $99-$700, depending on which one you choose and the level of subsidy.
• iPhone data plan at $30 per month (required for activation).
• iPhone voice plan (needed for the application to work) of at least $20 per month.
• PayWare sleeve is free (with a 2-year agreement)
• PayWare software is free (from the iTunes App Store)
  
• $19 per month fee (what I was quoted) per sleeve
• $0.25 per transaction (what I was quoted)

Consider this instead:

• iPod Touch at $199 to $499, depending on the one you choose.
• WiFi data is free (assuming that you already have the infrastructure or can hop on free WiFi somewhere)
• Various credit card apps on the iTunes App Store -- $0.99
• Transaction fees -- vary by provider, volume, type of card, and whether or not the card number is typed in or swiped in (1.8%-3.8%)

I'm very interested to see other products, such as the Mophie Marketplace, that allow swipe integration into existing applications that support authorization over the data network instead of initiating a cellular voice network authorization.

This is going to be a war that is unlikely to be won by Verifone if they don't divorce themselves from voice authorization. Furthermore, they're really going to lose if they can't get this working over WiFi because they totally leave out the iPod Touch (and the iPad).