Forget ka-ching. It's tap-tap these days.
Restaurants and shop owners fed up with antiquated cash registers and expensive credit card terminals are switching to cheaper devices that plug into smartphones and tablets.
There are players of all sizes in the burgeoning mobile payment systems industry, including big U.S. financial institutions such as Bank of America and small startups such as Square Inc. in San Francisco. It has become a crowded field, and some of the bigger players are expanding their products to set themselves apart.
"It was a very simple solution, which makes it very difficult to develop differences," said David Kaminsky, senior analyst for emerging technologies at Mercator Advisory Group. "Now you see them trying to expand into these slightly more complex tablet systems."
The standard bearer has been Square, among the first companies to enable credit card payments to be accepted on mobile phones through its Square Reader and app in 2010. It is now processing more than $15 billion in payments annually.
The company said it plans next month to release what it calls Square Stand, which incorporates a built-in card reader that attaches to an iPad and a USB hub that connects to accessories such as a cash drawer, receipt printer and scanner.
For the cost of an iPad and $299 for the Square Stand, the company says small retailers can get a cash register that organizes their inventory and provides instant sales analysis.
That's significantly lower than similar systems running on standard cash registers that cost thousands of dollars. The payment structure also is simpler than conventional credit card machines.
Faryl Ury, Square spokeswoman, said use of Square continues to grow on smartphones, but it's growing at a faster rate on iPads. IPad customers now account for nearly 50 percent of total payments processed by Square, and the average payment volume processed by iPad customers is more than double that of customers using smartphones.
Analysts expect a dogfight as PayPal takes on Square in the next few weeks with an incentive program. EBay Inc.-owned PayPal, the pioneer of online payment services, won't be unveiling its own stand, but it has launched a program called Cash for Registers.
PayPal will waive transaction fees for as much as $20,000 worth of transactions through January 2014 for the first 10,000 businesses that sign up beginning July 10.
Businesses that buy at least $450 in hardware can process payments through PayPal Here, the company's card reader for smartphones, on the iPad. They can also take cards or PayPal payments on other checkout stand systems that run PayPal software.
PayPal Here was initially geared more toward mobile payments than storefront purchases, the company said. In March, PayPal launched an app for the iPad, which can be bundled with stands that connect to a cash drawer and receipt printer.
Tablet-based cash registers are years, possibly decades, away from entirely replacing registers as we know them, said Seth Harris, founder of Breadcrumb, which was bought by Groupon in 2012.
"I don't think cash registers are going away tomorrow, but as more and more consumers get plugged in it's going to be necessary for business to adapt," Mr. Harris said.