“I can pull up by the curb
I can make it on the road
I am willing to wager that when Pete Townshend wrote these words for the Who’s chart topper “Goin’ Mobile” in 1971, he never thought it would be used to describe any type of credit card payment processing. Truthfully, who would? All puns aside though, these words do give a pretty good description of the mobile payment options available to merchants today and the freedom these options offer. However, merchants must take caution before running out into the world with their wireless terminals or card-swipe equipped smart phones. They should sit back and review their needs, see what options are out there that best fit those needs and, most importantly, see if any of these options fit their market. Now let’s break these steps down one at a time and get a better understanding of each.
Review the needs of the business. First thing to understand is all merchants can use mobile payment processing. It is not restricted to one type of business model. The question is do you need it? If your business is a standalone storefront where customers come in and purchase your services or wears, chances are you do not need a mobile payment option and a standard credit card terminal or Point-of-Sale system will do the trick. There are, of course, exceptions to this idea. A recent new merchant of mine, though a storefront operation, spoke with his fellow merchant at his location and they informed him that the phone lines were very bad and went out all the time. He spoke with me and we realized that a wireless terminal would be the best fit for his situation. Another merchant of mine runs a kiosk at the local mall. In order to run a phone line to his kiosk he would have had to pay an extra $60.00 a month in rent and then pay for the phone service. Again, we saw that a wireless option proved to be the best.
Okay, you saying, but what types of options are out there? Would be the second item any merchant should review. Basically there are two types of mobile payment processing; first, is a wireless terminal, this is a credit card processing terminal that has a cellular phone built into it that only dials one number. These machine are great for two reasons- one it works just like a regular credit card machine that everyone knows, it prints receipts, it has pin-debit capabilities and it will help keep your merchant costs down (more on that in a minute). The second option is a mobile smart-phone app- these are great options for hobby merchants or very on-the-go businesses, like lawn care services. They work similar to most credit card machines with signature screens and email or text receipts or even a printed receipt using a blue tooth printer. The number one issue some merchant have with these accounts is no ability for pin-debit. Smart-phone apps generally have two payment options for merchant fees- pay-as-you-go or regular monthly network. The regular monthly network option make the smart-phone and wireless terminal option the same thing, they both have a monthly access cost, but offer savings through lower retail merchant rates. The pay-as-you-go option though has no monthly fee, is higher in merchant rate fees, generally in the 2.69% to 3.15% range. If you are only using the merchant account once in a while, this is probably the best option for you.
Which option works best for your business type? The answer is either. Low volume merchants, like hobby merchants, might want to start with a pay-as-you-go account and move up to a monthly account as their business grows. A good guide is if your business is doing more than $1500.00 a month in credit card sales moving to a monthly account would be a smart move. Mobile processing is becoming more and more used in the business world today, that soon I expect to see the server at your favorite restaurant swipe your card right there at your table. Or the sales clerk at the local superstore ready and waiting to check you out without the need of waiting in line. Yes, you were right, Mr. Townshend, we are goin’ mobile.
What are your concerns, issues and worries about mobile processing? Have you experienced it yourself as a customer? Or as a merchant? I’d love to hear your thoughts.