If you operate one of the many business types that services customers away from a fixed storefront or other location, you face the challenge of accepting credit and debit card payments without the benefit of a traditional POS system and/or credit card terminal. You may think that one of the many mobile payment systems now available would be too expensive and wonder whether they are worth it, but you might be surprised at the cost. In fact, considering that most customers now expect to be able to pay with a card, and that card payments produce higher average tickets, you may actually lose revenue by not taking advantage of a mobile payment system.
The great thing is that mobile payments are now—thanks to smartphones and high-speed wireless networks—both easy and inexpensive. Merchant processors offer software and hardware that are compatible with a variety of iPhone and Android platforms.
Different Options For Accepting
There are a couple of approaches to mobile payment processing. Different web-based processing portals are available that work from any Internet browser, and that includes a smartphone browser. This may be appropriate if you only occasionally need to complete a mobile transaction and otherwise process card payments from a laptop or desktop computer.
The downside is that keyed transactions (meaning you key the card number into the processing gateway rather than swiping the card through a magnetic reader) carry a higher discount rate. If you handle any significant number of card payments each month, you’ll benefit from the more favorable swiped rate. Fortunately that’s easily accomplished, too.
Add-on card swipe hardware is available for most smartphones and tablets. In fact, many merchant processors will provide a swipe for free. Still, be aware that you’ll pay a higher rate even for swiped payments than you will with a “traditional” processing system. Discount rates are usually in the range of 2.5 to 2.75 percent for mobile processing.
Because mobile payment processing often involves a lower frequency of transactions, processors offer two main options. One is a “pay-per-swipe” arrangement. There are no fixed costs with this system, but obviously your per-transaction cost will be a good bit higher.
The other option is a fixed monthly fee plus a discount rate. The exact transaction volume at which shifting to this model makes financial sense will vary based on the exact pricing program, but in most cases it ranges from $1,250 to $1,500.
Run the numbers for your business and determine which one works to your best advantage. You’ll need to shop a few different processors to see what deals are available. Keep in mind that you need to monitor your card processing program as your business grows, since as your revenue levels change a new program may be more beneficial. The other important consideration is contract length. For a new business you should stick with shorter-term contracts to give you maximum flexibility. The last thing you want is to be locked into a pricing program that is more expensive than necessary because your revenue grew faster than you anticipated.
If you would like to get started accepting credit card payments for your business
Contact us today. We can help you get set up accepting payments in-store, online, or on the road. We have helped thousands of businesses set up their terminal and point-of-sale payment processing solutions. We can have you set up after a couple of quick steps.