As PayPal joins the already crowded mobile POS market, offering pricing below that of most of its competitors, incumbents in the space are racing to drop their rates. The result is a full-on price war certain to make accepting payments through mobile devices a more competitive option for small businesses.

Troy, Mich.-based Pay Anywhere, the mobile point-of-sale product from North American Bancard, announced it is dropping a $0.19 flat fee it had been charging merchants on every transaction and will only charge users 2.69 percent of every transaction processed. At 2.69 percent, Pay Anywhere is now the cheapest of the mobile POS providers on the market. 

PayPal, which launched its competitive PayPal Here product last week, charges merchants 2.7 percent for processing transactions on mobile devices. That's the same rate charged by Intuit's GoPayment mobile POS product and .05 percent cheaper than Square's popular app.

But NAB said it's not just competing on price. The company said its app also provides better user interface, security and customer support as well as a merchant portal so users can access account activity and reports through the Web.

"At NAB, we don't think of mobile payments as simply a card reader or an app, but rather as a total solution offering whose parts should work seamlessly together," said NAB Founder and CEO Marc Gardner.

Gardner said Pay Anywhere is "an all-in one, comprehensive mobile payments solution boasting the best price and the best features in the industry."

While fractions of a percent may not seem like much, the competing products in the mobile POS space are so similar, every little bit may help. 

For more information, visit the POS research center.