Ecommerce provider Powa has announced a new mobile payment service for the UK that is similar to popular US service Square. The new service, which is called mPowa, allows small business users to accept credit and debit card payments on their smartphones. Powa is backed by serial entrepreneur Dan Wagner.  Businesses are given a free card reader which plugs into the audio jack of their handsets. The reader is used in conjunction with an app. The company has not specified a launch date for mPowa although it claims it “will mark the first time a product of this type has been launched in the UK”. The service is similar to Square as well as a number of competitors which have been available in the States for some time.

Powa is pitching its service to small businesses such as plumbers, butchers or farmers’ market salespeople. Rather than being tied to a particular location using mPowa enables small businesses to take their products directly to customers without having to rely on cash payments. The app, which is not yet available in smartphone app stores, is free (as is the card reader) but retailers must pay a fee of 0.25% of any transaction. The app will handle payments on iPhones, iPads, Android and BlackBerry devices. In terms of security, Powa says its new service is 1 PC1 compliance which puts it on an equivalent level to a bank website. The service also uses additional identity verification measures. The location of each transaction is recorded by the app which makes fraud “near-impossible” says the company.