Offering mobile POS systems forsmall businesses can represent a big opportunity for credit unions,according to a March 2012 survey by Phoenix MarketingInternational.

The report showed 30% of surveyed small businesses with lessthan $1 million in annual sales would like to use smartphones ortablets to receive and process debit or credit card payments.

“Mobile payments platforms are more than just a credit cardreader that plugs into mobile devices; they can be a lifeline forsmall businesses and a source of revenue for credit unions,” saidDavid Keenan, general manager of Network Solutions at Fiserv,which began offering its mobile POS solution SpotPay to creditunions in the fourth quarter of 2012.

For some small business owners, being able to accept paymentsalmost anytime, anywhere is becoming a necessity.

“Mobile payment adoption is being driven by people likeretailers at farmer's markets, artists at festivals, food truckowners, taxi drivers and other small business owners whose salesaren't big enough to justify the expense and complexity ofaccepting traditional card payments,” Keenan added.

The popularity of Smartphones has spurred growth in mobilepayments and that trend is expected to continue.

“Now that almost everyone has a smartphone that can accept andinitiate payments, there's no telling how much growth we'll see inmobile payments,” Keenan added. “We haven't even scratched thesurface of what anywhere, anytime commerce means.”

SpotPay's secure card readers work with iOS and Android mobiledevices. Users are charged $8.95 per month and 1.99% per swipe formost transactions; American Express direct charges areexcluded.

Non-qualified transactions such as loyalty, rewards, corporatecard transactions are billed at 3.19% of transaction. VoiceAuthorization transactions are billed at 3.19% of transaction plus$3.95.

Read more: Centra Credit Union launches SpotPay…

Member demand drove the decision to launch SpotPay last fall at Centra Credit Union, said NanMorrow, director of marketing, branch sales and brand image for the$1.2 billion co-op in Columbus, Ind.

Members had seen advertisements for Square and were asking ifthe credit union was going to offer something similar available,Morrow said.

“We are very excited to be able to offer SpotPay to our memberswho own small businesses,” she said. “We want to provide theservices our business members need to help their organizationgrow.”

At Centra, rates of adoption have been somewhat slower thananticipated, but the product is receiving good reviews from memberswho have tried it, Morrow said.

“We've had six businesses add SpotPay as a form of paymentacceptance in the past couple of months,” she added. “They reallyappreciate having the service because it does expand the capabilityof small businesses.

Karl Kissinger, vice president of business services at Centra,agreed, adding: “The ability to pay anyone, anytime, anywhere isrevolutionizing commerce as we know it. We're pleased that CentraCredit Union is a part of this revolution. SpotPay is an innovativetool that helps deliver anytime, anywhere commerce while deepeningour relationships with our business members.”

Read more: Square vs. SpotPay …

San Francisco-based Square, founded in 2009, had a big headstart in the mobile POSrace and has unveiled new features on a regular basis.

Square recently announced an integration between Square andIntuit QuickBooks, which enables small businesses to moreefficiently import transactions, streamline operations, save timeand ensure accurate reporting, the company said.

“Square is focused on helping businesses grow,” said FrancoiseBrougher, business lead at Square. “Our customers tell us often howimportant it is to have accurate and in-depth information abouttheir business. Integrating with QuickBooks gives sellers anotherpowerful tool to help them run their business moreefficiently.”

One key difference between Square and SpotPay is that creditunions can offer SpotPay to their members from a co-branded formatand can share in the interchange income, Keenan said.

“Branding is critical for credit unions, so it is built intoSpotPay so that the member sees their credit union logo as areminder of who is providing this valuable service,” he added.

SpotPay is the only mobile payments product currently offeredthrough financial institutions and will soon feature remote-depositcapture of checks, and for ACCEL/Exchange members, real-time fundsavailability and account transfers, he said.

“The costs of taking card payments used to be a big barrier torunning your own business, but SpotPay is eliminating thatproblem,” Keenan said.

While he would not reveal an exact number of credit unions usingthe service or the amount of revenue that can be generated bycredit unions, Keenan said hundreds of financial institutions areoffering SpotPay.

“The specifics of our revenue sharing plan are proprietary, butit's definitely enough to be meaningful for credit union partners,”he added.

In addition to signing up at credit unions that offer SpotPay,small business owners can also sign up through the SpotPay websiteto be enrolled with their existing credit union. If the memberscredit union doesn't offer the service, the user will be enrolleddirectly until it does.

“Small business owners seem to prefer to adopt financialinstitution-centric solutions if those options are available, sothe hundreds of financial institutions that have signed up to offerSpotPay are seeing steady rates of adoption,” Keenan added. “If abusiness owner that belongs to a credit union is looking for amobile payments solution and SpotPay is available at the creditunion, the chances are good that the business owner will opt to usethe platform offered by the credit union because that's where theirbusiness and personal financial accounts are already managed.”