March 07, 2011, 7:58 PM — You gotta love blogs - I don't usually write much about payments, but I have had so many inquiries on the topic lately, that it made sense to share my thoughts with a broader audience.
[ See also: Mobile payments: Beyond Google and Apple ]
A growing number of small businesses are benefiting from smartphone based mobile payments capabilities. A growing number of companies including Square, Swipe It, Innerfence, Intuit and VeriFone have introduced mobile payments capabilities targeting small to mid-sized businesses. Not only do these companies enable physical store fronts to streamline and modernize how they ask customers to pay for goods, but it also extends capabilities to self-employed service providers, like plumbers and carpenters and to part-time retailers like flea market sellers. Some of these merchants may accept credit for the first time, others will find they reduce their costs and improve payments processing manageability by implementing new mobile payments.
For any small retailer who previously had to pay premium payments transaction fees including "card not present" transactions fees may be reduced with these services as well. Most of these services charge a fee for the hardware involved, a monthly fee for the service, and then transactional fees for processing credit card authorizations. Intuit is offering promotional pricing for its GoPayment service, that provides the reader and foregoes monthly fixed service fees, charging a flat 2.75% for transactions (other schemes are available); and VeriFone uses a two-tier rate scheme for PayWare - merchants with fewer than 1,500 monthly transactions pay a suggested retail rate of 2.75% of the sale, plus 15 cents, but no monthly fee; higher-volume merchants pay 1.65%, plus 20 cents, and a $19.99 monthly fee - the card reader is free with a two-year commitment, but there is a $29 activation fee. Every retailer may be able to negotiate specific terms, but this provides a good reference for those small to medium sized retailers considering new payments options, given the desire to introduce mobile, reasonably priced payments services.