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Inner Fence, the Redmond company taking on high-profile San Francisco startup Square in mobile payments, today released a credit-card reader accessory for merchants on Apple’s iPad. The accessory plugs into the iPad dock connector, and merchants can use it with Inner Fence’s existing Credit Card Terminal app for iPad.

The company already has a credit-card reader accessory for iPhone, but that design wraps around the bottom of the phone in a way that prevents it from working with the iPad dock connector.

Inner Fence’s new card-reader accessory is being marketed for the iPad, but its universal design will also work with the iPhone. The company plans to announce more details related to that aspect of the technology in the coming months.

“We’re already seeing high demand for our iPad app — more than twice that of our Android app. Small business owners find that iPads fit the way they work perfectly,” says Derek Del Conte, CEO of Inner Fence, in an email. “Adding a reader transforms iPads into even more powerful small business tools.”

It’s part of a broader push for advances in mobile payments across the industry. Separately, mobile phone companies are working to incorporate technology called Near Field Communication, or NFC, into their devices to allow customers to use their own phones to make payments at check-out registers. Google Checkout is an early example.

Inner Fence instead allows merchants to use their phones or devices to enter or scan credit cards. It also offers apps for Windows Phone, Android and Mac.

Square, the mobile payments company from Twitter co-founder Jack Dorsey, uses an accessory that plugs into the audio jack of iPhones and iPads. The company recently made headlines with an investment from Visa.

Merchants pay monthly and per-transaction fees to use the Inner Fence service. Inner Fence is offering a free credit-card reader accessory with a new account, and selling additional units for $79. Without the credit-card scanner, merchants using Inner Fence’s iPad app need to manually key in the credit card number.

Inner Fence says its new scanner accessory has been tested and certified by Apple as part of the Made for iPad program.

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