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Mobile Payment Options for Small Businesses

By on March 13, 2014 in Money

Mobile Payment Options for Small BusinessesIt is tough to be a small business these days. Consumers buy seemingly everything online at prices a small business can’t compete with. Customers that happen to come into the store may not stay long, and don’t seem engaged.

As bad as the news is for these business owners, there is some good news. Savvy consumers like savvy businesses and will support them when they can.

Imagine you operate a food truck and want to accept credit cards. Traditionally you would need some sort of telephone line to connect to a credit card machine that would connect with your merchant account to process the swipe of the card. But since your food truck moves you don’t have a dedicated phone line wherever you pull over. How can you compete?

Or maybe you don’t have a mobile business, but the cost of setting up a merchant account to accept credit cards is prohibitively expensive – the systems usually range between $1,000 and $3,000 and come with contracts and fees.

Options to Accept Mobile Payments for Small Businesses

Thankfully, technology is increasingly making it easier for these small businesses to process payments wherever their customers happen to be and as efficiently as possible. Whether you drive a food truck around town or just want to make your clothing boutique different by not having cash registers, mobile payment options are becoming more prevalent. Here are a few options to consider.

Physical Swipe Dongles

The first type of payment acceptance is physical devices called dongles that connect to either a mobile phone or tablet. The device uses whatever it plugs into to connect to the internet in order to process the payment.

Square

Square is the definitive leader and innovator in this space. The company was the first to breach into this new market and has seen a surge of popularity. The Square device is a small square payment swiping device that lets you physically swipe a customer’s card. The company takes 2.75% of every transaction.

PayPal

The online payment processing company owned by eBay was definitely late to the game. Square beat them to the punch and gained a lot of momentum at PayPal’s cost. PayPal charges 2.7% of every transaction.

Intuit GoPayment

Intuit also has gotten into the game with their own device. They offer more flexible terms for small businesses. Business owners can choose to pay 2.7% or if they have enough volume to warrant it, paying a $12.75 monthly fee to pay only 1.7% per transaction.

Cell Phone Wallets

A second type of technology is allowing consumers to completely change how they purchase: electronic wallets on your cell phone.

Google Wallet

Google offers a really neat application that lets you load your credit card information and use a technology called NFC to pay with retailers that have NFC readers. The NFC capability must be something that comes with your cell phone (it’s a physical addition to the core of your phone). The app can provide discounts at certain companies and let you manage all of your reward cards inside your phone.

Sprint Touch

The large wireless carrier is working on its own NFC payment system called Touch. Not many details are known, but it is to be similar to Google Wallet.

Isis

AT&T, Verizon, and T-Mobile are backing a new venture called Isis. Again the concept is the same as using Google Wallet for NFC payments. The wireless carriers don’t want Google (or any other individual company) have such an impact on something on their devices, so they’re coming up with their own version.

Final Thoughts

Consumer spending is rapidly headed toward mobile options. Instead of having to carry a wallet around with credit cards that can be stolen, consumers will be able to “swipe” their phones with NFC payments. For the customers that still carry cards around, having the ability to keep business operating costs low – or take your business to your customer – is an invaluable tool for a small business owner.

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