Home / Credit News / Mobile payment industry changes again thanks to two announcements

There have been many changes to the mobile payment industry in the last year, and now two companies - one a regular in the field, the other a new participant - could make these transactions more accessible once again.

Both Square and Dunkin' Donuts announced new plans for dealing with certain kinds of mobile payments this week; the former fundamentally changing the way in which it processes transactions, the latter allowing consumers to make purchases using their various mobile devices.

Dunkin' Donuts recently launched its new smartphone application and will now allow customers to use these devices to make purchases in lieu of cash or traditional credit or debit card payment, according to a report from the company. The system is not unlike the one currently offered by Starbucks, in which money is loaded onto a preexisting account and then the device is scanned either at the register or the drive-through when a purchase is made.

The balances on these accounts are updated in real-time, and can be reloaded using any Visa, MasterCard, American Express or Discover credit or debit card, the report said. But what separates the Dunkin' App, which is available for iPhone and iPod Touch, as well as Android devices, from the similar Starbucks program is that users can send and receive virtual gift cards to each other. This can be done via email, text or even Facebook.

"With our new mobile app, we are enabling an entirely new level of speed and convenience for our guests that will further distinguish our brand throughout the country," said John Costello, Dunkin' Brands chief global marketing and innovation officer. "We know that our guests rely on their mobile devices now more than ever, and we are glad to provide them with this exciting new service in a way that is uniquely Dunkin'."

Meanwhile, the mobile payment processing startup Square recently announced a potentially major change to its pricing policy. Now, it will allow small business owners with annual transactions valued at less than $250,000 to pay a flat monthly rate as opposed to a per-transaction processing fee.

The monthly cost won't be small at $275, but for companies that process slightly less than $21,000 in purchases a month, it can be a money-saver, the company said. Currently, the company charges 2.75 percent per transaction.

There would be some restrictions, however, the report said. For instance, purchases larger than $400 would still have the 2.75 percent swipe fee applied, and any transactions in excess of the $250,000 annual limit would as well. Further, any card transactions that are not swiped, but rather entered into the Square app manually, do not count toward the overall annual limit, but also come with a flat transaction fee of 3.5 percent plus 15 cents.

The mobile payment industry is changing rapidly and few experts are sure of where it might end up going, or which types of these transactions will catch on with consumers.