Since Square brought it to the mainstream, nearly anyone nowadays can accept credit card payments, and they don’t even need merchant accounts to do so—it’s the ultimate in convenience. But, aside from convenience, what’s the draw? Is the cost really worth it? Is it safe to use a mobile payment device like that?
If you haven’t jumped on the mobile payments bandwagon yet, you might not realize how much easier accepting payments on the go can make your reconciliation process. Imagine this, though:
Your salesman arrives at a customer’s door, product in hand. Your customer hasn’t paid for their product yet, but when they come to the door and take the product, your salesperson produces their iPad or their Android device equipped with a mobile card reader and slides the customer’s card. And…done. No taking an imprint of the card or writing anything down. No special instructions. It’s over as quickly as it began, and now your salesman can go to his next destination.
Behind the scenes, you have access to your payment gateway and all sorts of analytics and real-time updates so you can keep track of sales metrics on the spot. It’s a lot easier than waiting until the end of the day to process all of your credit card transactions, spending all that time manually reconciling, and then not even having access to your sales data in a live setting.
This is how it works: When a member of your sales team takes a credit card for payment and slides it through his mobile payments device—or even keys it in—the transaction is processed immediately. This gives merchant a chance for a much lower cost on those transactions because having everything already entered into your payment gateway reduces the chance you won’t have time to settle the batch at the end of the day and the cards will qualify at a “standard” rate, which can be as high as 2.95%. In general, it’s much easier to hit a button that says “settle batch” at the end of the day than it is to enter everything into your gateway manually and then remember to hit the button.
If you happen to use Square for mobile payments, pricing is a little different, as you’re charged 2.75% for all swiped transactions and 3.5% for all keyed ones, but you don’t have to worry about a gateway, settling a batch, or even analytics. (Square is perfect for businesses that don’t accept many transactions per day, or where credit card volume is an insignificant portion of total revenue. For anything other than those circumstances, though, it’s better to use a bona fide payment gateway for the lower costs and presence of reporting tools.)
PCI compliance is more important than ever, what with EMV technology and mainstream data breaches still fresh on everyone’s mind. So, how do mobile payment solutions help protect your data more than using some other solution?
Well, if you employ mobile salespeople, your processing options are a little limited: you can either use a mobile device to process the transaction or use one of those credit card imprinting devices, which is just as good as writing a number down—so, it’s not really a payment option per se since no processing takes place. Using imprinters is a huge liability because they leave a paper trail—literally, complete with full credit card numbers—which is a PCI compliance violation. No matter how diligent you are about shredding your used carbon slips from imprinters, there’s always room for error in that situation, whether you forget to shred or you simply lose one of your carbon slips—or it’s stolen. (It does happen.) With a mobile payments device, the possibility for error is reduced since full credit card numbers can’t be accessed once they’re run through one of those devices.
Some mobile payments devices offer tokenization technology, which is not available with a card imprinter. Your current payment gateway, if you indeed use one, might use tokenization—but, if you have to wait until the end of the day to see the total batch, there’s a chance some of your slips could have been misplaced or lost. Imprinters cost about the same as a mobile card swiper ($100 for a high-end one that qualifies cards correctly).
If you have a mobile-based business, you could increase your income by using mobile payments devices. You could also reduce your total processing costs, without putting your customers’ credit card data at risk. The reduced processing costs and added convenience with entry and reporting also ends up saving money in the form of better time management.