>In the UK, you do go to your bank if you want a card processing account.
This is true in Canada too, but they send you to a company like Moneris that does the processing. It is kind of weird right now because every bank and phone company is launching their own system right now for phone based payments and Moneris the big CC and debit card processor is putting out a device that does CC and debit (encrypted Bluetooth to tablet or smartphone).
>Those people have an advantage over everyone else should they want to add the facility to pay using your phone to that.
There is no doubt about that being true, however, the bank or CC company also has a bigger liability issue when it acts on both sides of a transaction, and given the fact in the article about the CC companies taking 80% of the processing fee, I don't see how it is in their interest to take the additional risk on the other 20%. Let the small fry take care of this. Much like how mainstream processors will not do business with 'adult' sites due to charge-backs, so there is a whole industry of processors from just below mainstream standards to too dodgy for even organized crime to use.
>As someone who sometimes pays using plastic cards, I would trust a bank supplied app for phone based payments more than I would trust some tech startup I've never heard of.
If you haven't heard of Square, I assume you are not in North America, because here it is the darling of small business or independent 'techy' types as there is less hassle than the PayPal card reader and no monthly fees like the bank/third party system. It is a company doing $20 billion in processing a year, hardly a fly by night company.