Five years ago, Twitter’s Jack Dorsey founded Square, Inc. An innovative startup, Square offered portable card payment processing for small businesses during a time in which card acceptance was becoming increasingly vital to business success.
Square took off. You can find it hooked up to iPhones and iPads everywhere: in coffee shops, restaurants, clothing stores, even farmers markets. Your business might use one too. And it might seem like the best choice. That’s because Square’s marketing efforts are so well funded they eclipse the competition, which is expansive and oftentimes much less expensive. Consider this: merchants currently pay approximately $50 billion annually in swipe fees. If you’re an entrepreneur or small business owner, it’s probably welcome news to know that more affordable mobile payment processing is available to you.
Related Article: Mobile Payment Options for Small Businesses
Let’s take a look at what’s out there!
When Square debuted, it was one of the cheapest mobile payment processors on the marketing, offering a flat-rate fee of $275 for businesses with monthly debit and credit card transactions of roughly $21,000. Not anymore. Now, Square charges a swipe fee of 2.75 percent, or 3.5 percent plus 15 cents for each manually entered transaction.
Do you rely on Quickbooks and other Intuit products? GoPayment just might be your pick. Not the most aesthetically pleasing app, it does allow you to easily plug in all of your Quickbooks activity, which is a major plus when you’re making a quick sale or one on the go.
Currently, there are two plans available. The regular plan with no monthly fee will cost you 2.4 percent plus 25 cents per transaction, and is not recommended for businesses with many small transactions. For $20 per month, the rate is 1.75 percent plus 25 cents per transaction, though you’ll have to sell more than $3,000 per month for it to be worthwhile. Keying in transactions will cost you around 3.4 percent plus 25 cents or 3.15 percent and 25 cents.
Does your business utilize PayPal? The PayPal Here mobile solution is part of the company’s payment processor/merchant account package and accepts payments that connect with your PayPal debit card and online account. This stylish app comes with powerful reporting tools and a GPS signal that can be used to attract local buyers.
Accept credit card, PayPal funds, and checks with PayPal Here. For a flat fee of 2.7 percent, you can process any type of credit card. Though you will have to wait a few days for the money to clear, accepting checks is free. Keying in a transaction will cost 3.5 percent plus 15 cents. It’s worth noting that non-US cards have an additional fee of 1 percent.
Flint is the new guy in town, and its focus is on service industry businesses. It provides no point-of-sale (POS) device or card reader. Instead, you take photos of cards with your phone and Flint processes them. The app offers invoicing through PayPal Here and can integrate easily with Quickbooks, too.
Debit card transactions will cost you 1.95 percent, and 2.95 percent for everything else. One major downside is Flint only supports Visa and MasterCard transactions. Though it is worth remembering that these cards comprise 90% of the market, if you often have customers paying with AmEx, etc., then Flint may not be the processor for you.
Amazon Local Register
Also relatively new, Amazon Local Register is an app available for Android, iOS and Fire OS products, with built-in analytics, purchasing information, and more. Local Register also provides business owners with a vast array of accessories and hardware updates for its POS solutions.
Back in October, Amazon offered business owners a killer deal: sign up before October 31 and you’ll lock in a rate of 1.75 percent until 2016. Now, you will pay 2.5 percent, and keyed-in transactions will cost 2.75 percent with no additional per-transaction fee.
Merchant Services Provider
Merchant service providers are a great choice for small business owners. The best will provide you with the capability to accept everything from debit and credit cards to checks and mobile payments. Look to them for sleep POS terminals, loyalty card programs, shopping cart services, and advanced reporting and inventory functions.
Merchant service providers’ fees vary. Transaction costs are based on the type of transaction and the type of payment used. Rates for debit and credit cards can range from .05 percent plus 22 cents to more than 1.60 percent plus 15 cents. By not charging a flat rate like other processors, providers save businesses money each month.
Pass-through interchange is a popular pricing module used. It passes through card brand costs with a small markup added and is a transparent way of pricing increasingly popular among businesses of all sizes. Well-known providers include Targeted Merchant Solutions, Durango, Dharma, and Payline.
Published: March 4, 2015