Bank of America Enters Mobile Payment Market

Bank of America has introduced a mobile payment system that turns smartphones and iPads into credit card readers.

The "Mobile Pay on Demand" service is a joint venture between the bank and payment processor First Data. It will become available on December 3.

The product allows small business owners to swipe a credit card through a plug-in card reader. The service will not have any monthly fees, and will include a free mobile app. It also has the ability to send online coupons and other promotional offers.

A number of competitors have already entered this exploding market including Square, Groupon and PayPal.

Bank of America will reportedly charge a 2.7 percent fee per transaction.