Basics of Accepting Credit Cards (Mobile)
This is the fourth (and last) in my series about accepting credit cards. In previous articles, I talked about how to accept Debit Cards, Point of Sale Credit Cards, and Online Credit Cards. In this final article I will discuss some options for accepting credit cards using mobile devices, which might be valuable for consultants that travel frequently or businesses which are face-to-face but don’t happen inside a retail store (Bands, for example).
Each of the payment options described in this article requires a smartphone of some sort. Most of them have support for various Android and iPhone models, though the support varies for those vendors which require you to attach a special case to your phone. In addition to the required smartphone, most of these vendors provide support through an App in your phone.
Square is definitely getting a lot of attention. Founded by Jack Dorsey of Twitter, it is one of the bigger players in this space, and arguably the front runner. The incredibly simple signup process, free reader, and its recent announcement that it would be removing per-transaction fees for swiped payments definitely makes the barrier for entry low on this. Their pricing for swiped cards is 2.75%, or 3.5% +$0.15 for keyed entries. If you are expecting less than $1000 a week in payments, all with credit card present, then Square is a highly competitive offering with a convenient swiper. One of the more convenient advantages of this device is that a single reader can be swapped between an iPhone, iPad, and Android phone, giving you the most flexibility. As new tablets become the rage, the same reader might be able to work with those new devices at the cost of a new app for those tablets. Of course, a recent letter from the president of Verifone (a competitor described later) claims the product is insecure. While they originally had an app and video showing how to acquire this data, it has been pulled. Anyone thinking about square might want to watch the news for an official response from Square.
Intuit is emerging into the mobile payments space in a big way, with a pricing scheme which seems directly targeted at the market which Square is trying to appeal to. Their large volume pricing has been around for some time – you pay $12.95 a month, plus 1.7% for swiped cards and $0.30 per transaction (2.7% if you key in the card). As of January, they have been playing around with a free model which closely matches Square’s pricing, coming in just under them at 2.7% + $0.15 for a swiped transaction. One key difference is that pricing for American Express transactions varies, and some Mastercard/Visa/Discover transactions will go through at a higher rate (when keyed in). If you are expecting higher weekly volume, Intuit’s paid goPayment system seems like a pretty strong contender in the space, making you feel the price of Squares 2.75%.
Mophie was actually the first player with a credit card reader for the iphone, and anyone who went in to an Apple store to have their purchase completed by an iphone probably saw this device in action. It requires a specialized case fitted for your phone, which includes a card reader. Combined with an app that has comparable features to all the others, you can quickly accept credit cards through Intuit’s goPayment system. With Intuit supporting newer, more convenient, readers – it is hard to recommend this unless you pick it up on the secondary market.
Verifone has a case-based solution similar to the Mophie solution. Their cases are designed to read to the right of the phone, which leaves a bit to be desired (at least if you hold the phone in the deathgrip which causes the antenna to stop working). They are much less open about their pricing, as it varies depending on volume, transaction styles, and other variables. They are definitely a known player in the space, and will probably end up tweaking their business model to be competitive with Square and Intuit, but it seems like their first foray into the space was instead to try and defame their competitors. Worth talking to them to see what their rates are, if your business model sees high volume and needs to take credit cards on the go.
Let your customers know
Any of these solutions works to get you started, but once you have one of them don’t forget to let your customers know. I personally enjoyed the first time I was able to whip out my credit card reader at a conference and take a payment from someone, especially the reaction to the convenient little thing. I’ve also heard of a few places using the iPad as an ordering system with one of these attached to take credit cards. Remember that the goal here was to add convenience so that you could close the sale. Keep it convenient, and enjoy the wow factor of taking a credit card with your phone.