Bank of America releases a mobile payment service to compete with Square

The latest company to plunge into the world of mobile payment services is Bank of America, which announced it new Mobile Pay on Demand dongle today.

The new dongle allows people to process credit and debit card payments from an iPhone, iPad, or Android device. Money from each transaction goes into a Bank of America account, and there’s a 2.7 percent fee for each swiped transaction (3.5 percent for non-swiped/keyed in transactions).

The dongle/service is targeted at small business owners who are likely to find it attractive due to its convenience and the fact that it charges a lower transaction fee than most credit card services. And that fee is also slightly lower than Square’s, which is 2.75 percent.

Bank of America’s Mobile Pay service is hardly the only mobile transaction service available these days. In addition to industry leader Square, Bank of America Mobile Pay will face competition from Intuit, PayPal Here, LevelUp, and a new service from Groupon.