Bank of America announced a new small business product, Mobile Pay on Demand, Tuesday. The product consists of a card reader and mobile app, and will be available Dec. 3. Mobile Pay on Demand works with iOS and Android smartphones and tablets.

The product was developed jointly by Bank of America’s Merchant Services and FirstData, an Atlanta-based payments processor. Bank Innovation spoke with Trevor Rubel, executive vice president of product & strategy; Zach Lynn, group product manager for loyalty and marketing programs; and Matt Morrow, product manager for mobile payment products and strategy.

“Mobile Pay on Demand is definitely for small to midsize business customers,” Rubel said, “but mobility is important for all sizes of customer.” The solution offers next-day access to funds, which is important for smaller businesses with tighter cash-flow situations.

Already, 6,000 clients are running transactions in BoA’s Merchant Services environment. The device (seen at left) and backend tap into the existing environment, but many components of Merchant Services have been completely reconfigured for the new product launch. The core processor was updated with all-new signup and underwriting processes.

The process of testing and piloting the device and accompanying services began in July, Morrow said. The design process happened in parallel during the same period. Industrial design firm Frog helped design the dongle, which has a longer swipe base than Square, and contains “blades” to secure the dongle to devices of various size.

Development and testing was completed so quickly in part because of BoA’s large number of users. “We’re lucky to have such a large existing user base. We have a lot of market information to work with,” said Rubel.

The Merchant Services platform also ties into Bank of America’s iDeals marketing system. The modules work interdependently or together to form what is hoped to be a complete small-business platform. This format allows customers to create coupons, special offers, and loyalty programs that can be pushed to customers via social media, Lynn told Bank Innovation.

Fees run at the industry-standard 2.7% per swipe and slightly higher for keyed-in transactions. There are no setup or subscription fees and “modest fees” when customers redeem coupons or special offers.

A recent JD Power and Associates report indicated that small business customers’ satisfaction is lower than that of general retail customers, and among banks included in the survey, Bank of America was near the bottom of the pile.

Bank of America Merchant Services processes more than 13.5 billion transactions annually.