PhoneTransact Releases Credit Card Reader for IPhone

The iPhone and iPod touch are growing in popularity among merchants big and small, as they increasingly use Apple's gadgets as new-age cash registers. Some App Store apps allow businesses to type in credit card numbers to accept payments from customers, though a handful of companies like Square, VeriFone, and Mophie have announced hardware credit card reading attachments. On Friday, PhoneTransact entered the market with its own reader that works with its existing iPhone POS (point of sale) app.

For some time, PhoneTransact has offered iMerchant Pro, a POS app that lets merchants process payments by typing credit card numbers into an iPhone or iPod touch. Now, PhoneTransact also offers a hardware accessory, aptly called Credit Card Reader, for aforementioned gadgets, which should put a sizable dent in the amount of time required to process a payment. The Credit Card Reader offers bi-directional card reading and meets ANSI/ISO standards, and it encrypts all sensitive card data with 3DES, or Triple DES, encryption used by the electronic payments industry.

PhoneTransact's reader is designed to work with iMerchant Pro, plugging into the dock connector of an iPhone or iPod touch. Its iPhone app is compatible with a long list of merchant accounts, and you need to have or sign up for such an account to process payments with the app and PhoneTransact's new Credit Card Reader. In addition to basic credit card payment processing, iMerchant Pro supports refunds, credits, voids, e-mail receipts, GPS map-enhanced receipts, multi-business environments, sales charts and statistics, password protection, audio feedback, fraud protection, recurring billing, and more.

The Credit Card Reader is available now for the iPhone 3G and 3GS, as well as the iPod touch 2G and 3G, at a list price $130, but is on sale through August 20 for $100. PhoneTransact says that an iPhone 4 version should be ready by Q4 2010.

By contrast, Square took the unique approach of giving its credit card reading dongle away for free and not requiring a merchant account. Earlier this year, however, Square ran into trouble shortly after launch with meeting hardware demand and implementing fraud protection.