Verizon's tablet-based processor may indirectly help e-commerce

Verizon's tablet payment strategy could benefit physical businesses

p>Telecommunications giant Verizon announced a new credit card payment strategy on Thursday that may help brick-and-mortar businesses conduct physical credit card transactions via mobile devices. However, the solution doesn't do much for e-commerce businesses that need online payment processors and are looking for a Paypal alternative.

Through a new relationship with a credit card processing provider, Verizon will unveil an app that will allow small businesses to accept credit card payments through a tablet or smartphone. Business owners would have to obtain a credit card reader from Verizon – offered for free after a mail-in rebate. Credit or debit cards could then be physically scanned through the reader, which promises convenient features, data encryption and robust customer security.

The app could be useful for businesses with a physical storefront that may have been previously unable to accept credit cards. At the same time, it's not without its own costs – owners would have to purchase a Verizon smartphone or tablet if they don't have one already, pay the monthly service changes and acquire the card reader. The payment app is available for free, but the paid version features better discounts for transaction fees.

Though the high-profile partnership could benefit brick-and-mortar businesses, it offers no direct solutions for online-only merchants. At the same time, it might help customers grow more accustomed with the concept of mobile payments. That, in turn, could help out e-commerce ventures that have been talking to their merchant account manager about adopting mobile payment capabilities.

Most entrepreneurs recognize the increasing value of these platforms, but it can be a struggle getting customers comfortable with the technology. A 2011 survey by Cardbeat reported 50 percent of consumers are “very” or “somewhat” uncomfortable processing payments via smartphones or tablets. Since Verizon is a significant player in global commerce, the company's latest move might open doors for e-commerce companies.