Spark, formerly Telecom New Zealand, is the latest company to see the attraction of pitching the SME market with a mobile point-of-sale reader.

The operator is launching Swipe, a reader which enables businesses to process payments using their smartphone or tablet. It was developed by local firm Optimizer.

The product is designed in particular for businesses that don’t generate the transaction volumes to justify investing in a mobile payment terminal with monthly fees and a long contract, said Spark.

The operator, which is the country’s second-largest operator with 2 million mobile connections, changed its brand to Spark earlier this month.

“We have done extensive research with our business customers, looking at what we can do to make their lives easier,” said Chris Quin, chief executive, Spark Home, Mobile & Business.

“A mobile payment solution was something that they repeatedly asked for as a means of cutting down on paperwork and freeing up cash flow, but business owners didn’t want to pay the earth for it or be locked in to paying a monthly fee for years,” he added.

Swipe is offered via an open-term contract with no monthly fee, which is the standard approach in other countries.

The card reader plus a merchant account has a one-off cost of NZD399 ($338) plus GST (the country’s goods and services tax), which is relatively expensive for such devices which are sometimes free.

The transaction rate is a competitive 2.75 per cent for credit card transactions and 1 cent per EFTPOS (electronic funds transfer at point of sale) card transaction (charities get a discounted 0.95 per cent rate).