Thursday, December 19, 2013

Accepting Debit/Credit Card Payments on The Go

Accepting credit cards used to be expensive and troublesome for small businesses. Nowadays, it's easier than ever! Before you had to set up a merchant account with your bank that allows you to process card payments and pay a hefty commission charge to the bank for each transaction. You also had to pay a monthly fee to rent the payment terminal.

Not anymore. Technology leaps has made accepting card payments a piece of cake! instead of a costly device, you can process payments with only a smartphone and a free app. As expected, lots of companies jumped on the opportunity to develop mobile payment solutions, such as appropriate Chip & PIN systems, mobile card readers and free apps. All systems share some features that make them excellent choices for small businesses.

For example the iZettle Chip & PIN reader is identical to those devices provided by Payleven and other mobile payment solution providers. They differ however in other aspects such as transaction and set up costs, daily limits, and types of cards that can be accepted.

Here's a review of the four most popular mobile payment solutions out there, and a summary of their most important advantages and disadvantages to help you decide which mobile payment solution is best for your own type of business and requirements:

Chip & PIN readers for iPhones and Tablets

iZettle (1.50% - 2.75% depending on the volume)

· No monthly lock-in
· No minimum turnover requirements
· Uses signature to authorise general transactions
· Inability to accept VISA payments through the signature reader, but has recently come up with the wireless chip & pin reader with full support for VISA and Mastercard payments
· £100 daily limit for transactions using the magnetic stripe. £25,000/day limit for business accounts and &10,000 per card and transaction.

Payleven (charges 2.75%)

· Uses an EMV compatible card reader device: can process payments in Europe without payment fraud risks and without getting revoked by the card networks.
· Upfront cost of £82.50 +VAT · Provides telephone support in the UK
· Allows gratuities/tips payments
· Does not accept Diners Club or American Express card
· Charges are set and does not depend on volume
· Longer settlement delay of 5 -11 days compared to iZettle's 3 business days

Sumup (charges 1.95%)

· Lower transaction fees
· Up front price is the cheapest at £19.95 (including VAT)
· Allows tips or gratuities
· Only accepts Visa, Visa electron and Mastercard
· Uses signature authorise transaction. For Visa card holders - they provide their phone number where link is sent by SMS, card details are given using customer's phone
· No magnetic stripe reader
· Does not support printer
· 7-10 days settlement delay

Square (charges 2.75% per swipe)

· Accepts Visa, MasterCard, American Express, and Discover
· Next-day deposits. Payments into your bank account in 1 to 2 business days
· No upfront fee
· Free card reader
· Free online store in Square Market
· For manually entered transaction fees rise to 3.5% +15c
· Limited to USA merchants

How is your business preparing for the huge consumer shift to mobile?