Should Your Business Accept Mobile Payments?

Author: Caron Beesley | December 2, 2014

While cyber security remains a concern (according to eBay’s 2014 Holiday Retail Audit, 65% of retailers are worried about a breach), businesses who need a way to receive payments on the go can no longer ignore the power and convenience of mobile point of sales (POS) systems and card readers such as Square, Intuit GoPayment and PayPal Here.

Here’s a breakdown of the key players, pricing, and considerations that your small business might have:

Are Mobile Point of Sales Systems a Good Fit for Your Business?
Mobile credit card payment services are not just about convenience, they’re also useful for exploring new markets. Open new doors and generate new revenue streams by taking your business on the road to fairs, events, festivals, and so on.

Mobile card readers aren’t just great for retailers. Contractors and other service businesses can also use card readers to accept money on-site and end the hassle of billing a client or waiting for a check to process.

If you’re in the food service business, mobile card readers let you take the point of sale directly to the customer right at their table, making “getting the check” so much easier.

And, if that’s not reason enough, take a look inside your customer’s wallets and you’ll find that the use of cash is declining in favor of plastic. In fact, a Bankrate survey found that more than two-thirds of consumers carry only $50 in their wallets while 40% carry less than $20.

What are the Costs?
Of course, accepting credit cards isn’t free and many small businesses are reluctant to pay the high fees associated with merchant accounts. The good news is that mobile POS systems simplify and cut the costs of accepting credit cards – making them an ideal solution for smaller businesses. You don’t need a lot of hardware, just a tablet or mobile device and the card reader itself (which is free).

If you already have a merchant account or a relationship with a credit card processing company you can probably start accepting payments right away, although you may be charged a set-up fee.

If you decide to forego the traditional route and go with a service like Square, many of the fees associated with credit card transactions (set-up, refunds, etc.) are waived. Instead you pay a flat-rate 2.75% fee per swipe and funds are deposited within one to two business days. Get more info on Square pricing here.

Intuit GoPayment’s pricing structure is slightly different. There’s a pay-as-you-go plan for 2.4% + 25c per swipe for less than $3k per month or you can sign-up for a monthly plan and pay a flat $19.95 per month and 1.75% + 25c per swipe. As an added bonus, all transactions synch with QuickBooks and Intuit Point of Sale products.

The cheapest of the big three players is PayPal Here with a 2.7% swipe fee, no hidden charges or long-term commitment.

Read more about Mobile Credit Card Pricing and Processing Fees from Business News Daily.

How Secure are Mobile Card Readers?
GoPayment, Square and PayPal Here are serious about card protection and adhere to PCI Data Security Standard (PCI-DSS) which means that consumer credit card data can’t be stored on the device. Readers are also encrypted and other security and fraud features provide for a layered security approach. Square is very open about its security practices (having hit the headlines early on for launching an un-encrypted card reader – now fixed).

Essentially, mobile payment services are as secure as regular credit card processing stations.

How Do I Choose?
If you’re already a QuickBooks user, then GoPayment with its seamless integration with QuickBooks is well worth considering. Its flexible pricing options also fit well with the needs of high-volume sales and the serious business user.

If you’re looking for an out-of-the-box no-frills approach to mobile point of sale, consider Square. It’s also a good fit for small business owners who don’t want to be locked into a commitment – no contract, no merchant account, just pay-as-you-go and avoid a whole host of fees. It’s also easy to use and makes the actual credit card transaction quick and easy for you and your customers.

PayPal Here’s strongest advantage is its pricing – 2.70% per swipe – less than both Square and GoPayment. It’s also backed by the power of PayPal’s extensive support network. And, as a nice marketing touch, it also includes a GPS device that lets mobile users pinpoint businesses who accept PayPal Here or PayPal.

For a more detailed comparison of the three top players and others, including Wells Fargo PayAnywhere reader and Amazon Local Register, read: Which Mobile Credit Card Reader is Right for You: 7 Major Services Compared.

Finally, before you decide, don’t forget to talk to your accountant so that you have a clear view of how a mobile payment platform will fit into your cash flow management processes.

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