The macthbox-sized SpotPay reader, developed under license for Fiserv from MagTek, handles swiped card payments and encrypts the data as it links to the mobile app. Payment processing is handled by WorldPay.

The SpotPay app also incorporates Fiserv's mobile remote deposit feature, providing merchants with the capability to scan and accept cheques from customers.

SpotPay is available to financial institutions that are part of Fiserv's Accel/Exchange payments network.

Beth Robertson, director of payments research, Javelin Strategy and Research, comments: "SpotPay from Fiserv should help financial institutions retain and strengthen their small business relationships. Its competitive pricing and innovative features could be strong differentiators in the crowded mobile merchant payment solutions market."

According to a March 2012 survey conducted on behalf of Fiserv by Phoenix Marketing International, 30% of surveyed small businesses that have under $1 million in annual sales indicated that they would like to use their smartphone or tablet to receive and process debit or credit card payments from their customers if the service were available.

Fiserv says that SpotPay provides banks with the tools to gatecrash a gap in the payments market that was first spotted by Jack Dorsey's Square start-up and has since been swollen by a host of similar devices from the likes of PayPal, Intuit and VeriFone.