Payment processors MasterCard and First Data Corporation on Wednesday launched a mobile point of payment (mPOS) solution in Hong Kong, providing merchants an alternative way to accept credit card payments via mobile phones and tablet devices.

Insurance company Prudential was disclosed as the first enterprise client of the solution. A pilot team across its agency and bancassurance salesforce will employ the Pogo> card reader in conjunction with their smartphones or tablets when broking policies.

The device plugs into the headset jack of the phone and an app guides the customer through the payment steps, which include on-screen signing, a tipping function and electronic receipts sent via e-mail. The interface of the app can be customized by the merchant. The solution accepts both MasterCard and Visa branded credit cards. There is no plan to add China UnionPay cards at the moment, executives say.

Kevin Goldmintz, head of Hong Kong and Macau at MasterCard, commented at the launch event: "Hong Kong is a fast paced city, where it is all about efficiency. Small merchants and large enterprises are looking for fast and secure payments … We see tremendous potential for further expansion in the mobile payment space and we observe significant demand from large corporations here in Hong Kong, such as those insurance, retail and hospitality industries."

"The payment space is undergoing tremendous change, driven by consumers. Mobile POS is all about giving the freedom to the consumer to make the purchase transaction at the location most convenient to them," added Amrish Rau, general manager at First Data Merchant Solutions.

Mobile point of sale devices are not new to the Hong Kong market. Local Dah Sing Bank launched a similar service in collaboration with Visa in December of last year, targeting insurance providers, logistics companies and trade vendors at exhibitions. Requests for information about adoption rates of the service were left unanswered by Dah Sing Bank.

Globally, jumpstarting credit card acceptance via mobile devices is widely credited to San Francisco based Square, which processes about US$15 billion in annualized mobile payments volume as of May 2013. First Data representatives did not disclose details on transaction volume via the Pogo> mPOS solution in the US, where the service was launched last year.

MasterCard pointed out that about 1.2 million mPOS devices were shipped to merchants in 2010 and 2011, of which 75% had not been able to accept card payments before.

The First Data mPOS solution is EMV Level 2 certified, which is the highest security standard that the industry body EMVCo currently conveys to applicants. The associated app runs on Apple and Android operating systems.

Card acceptance via mobile differs from proximity payments, which are made possible with specific devices that support near-field communication (NFC) technology. Consumers can make purchases at NFC-enabled POS terminals by bringing the two devices in close proximity. An account or credit card linked to the phone is then charged.

While acceptance towards both proximity payment and mobile POS solutions has yet to be determined among consumers (and merchants), investments continue unabated by banks and non-bank service providers. When asked which region globally will see the greatest investment in mobile banking and payments over the next 12 months during a survey among Sibos conference attendees in September, nearly half of industry professionals named Asia, compared to 24% in Europe and just 5% in North America.

In some jurisdictions, service providers are aided by regulators seeking to reduce the share of cash-based transactions. In Malaysia, the central bank has recently embarked on a plan to boost cashless transactions per capita from 44 to 200 and reduce usage of cheques proportionally by more than half from 207 million to 100 million by 2020. First Data plans to roll out the Pogo> mPOS solution in Singapore and Malaysia as well, and has on-boarded pilot clients in those regions, executives say.

CIMB Bank on October 21 launched Malaysia's first mPOS solution, named Plug n Pay. Portable card readers issued by the bank accept MasterCard and Visa branded credit cards. Apart from smaller SMEs that previously did not have the ability to accept card payments, the solution primarily targets companies with large sales teams, logistics firms and hypermarkets.