With Bank of America's announcement today of its new Mobile Pay on Demand product, the bank is taking what is perhaps the next logical step as the industry continues to battle against "non-traditional" competitors, especially in the payments space.
Designed as an alternative to Square's card reading device, Bank of America's dongle product will also be free and users will be charged a flat 2.7 percent transaction fee -- slightly less than Square's 2.75 percent but the same as PayPal's Here device.
BofA's launch of this product can hardly be considered revolutionary, but may become a necessity for banks to continue to compete in the payments space -- or, as Bank of America's EVP of strategy and emerging products, Trevor Rubel put it to tech blog All Things D, "I hate to come out with a commodity product, but every bank should have one."
Square has obviously moved well beyond its initial mobile credit card reader. The company's partnership with Starbucks announced this past summer gave it further footing in the mobile payments market. And with other non-bank competitors, such as PayPal, not only offering mobile card readers but a whole suite of mobile payments options, it's imperative for banks to ramp up their offerings in this space as well. The guess here is that there will be many more announcements in the coming months from Bank of America regarding this product, and from other financial institutions as well pertaining to mobile payments.