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Square For Mobile Credit Card Processing
Anyone who has ever tried to sell things outside of a store, like in a craft show or business
expo will know that taking credit card payments while away from a credit card terminal can
be a pain. You have to mess with those stupid carbon sheets and hope that the person is
not defrauding you. Oh yeah, and you have to input all of the credit card charges after
the show when you get back to your office completely exhausted. Certainly not the most
convenient way to do business.
So someone came along with the idea of using the smart phones in our pockets as credit
card terminals. The company is called Square and they’re making a pretty big wave in
the marketplace.
Here’s how it works. If you own an iPhone or Android phone, you can download a free
app from either iTunes or Google Play which was formerly known as the Android market.
You will need to add your financial information to the app, obviously, so that Square can
make deposits into your bank account.
Then go to the Square’s website at squareup.com. You can sign up there to have them send you
a free small Square card reader that plugs into your iPhone or Android phone. You can
also purchase the Square readers at many RadioShack’s and Best Buy stores, but considering that
Square will ship it to you for free and it will arrive in 3 to 7 business days, it’s
probably worth the wait.
The fee structure is very simple, 2.75% per transaction on all major credit cards, Which
makes the math very simple. If you don’t use the Square card reader, meaning that the
credit card is not in your posession at the time of purchase, the per transaction fee
is 3.5% plus $.15 per transaction. Payment is made the next business day, which, as anyone
who’s ever had a merchant account knows, is pretty good.
Square has the capability of revolutionizing several points of irritation for both small
businesses and nonprofit organizations. This last Christmas season the Salvation Army used
Square to collect donations for their famous red holiday donation buckets. In 2011, merchants
processed almost $2 billion through Square readers and Square passed the 1 million active
merchants mark at the end of the year.
Square has had some minor problems with security issues but has taken them head on and made
improvements to their product to alleviate them, improving their internal data encryption
between the phone and their processing facility.
There are a few other things to consider when using Square. There are limitations on the
number of transactions that can be run by a new user in their first few weeks, so if
you plan on processing several thousand dollars in your first week, you may have some of your
funds held by Square.
Also, the fees for card-not-present transactions is not very competitive and funds from card-not-present
transactions may be held longer for verification. However, the purpose of using Square is to
be able to take credit cards in places where merchant terminals usually can’t go, so
you probably don’t want to use it if the person can’t hand you their credit card
anyway.
Large ticket transactions and changes in transaction behavior can freeze your account, as is the
case in almost all credit card service companies. If you expect a large ticket transaction or
changes in your transaction pattern, you should notify Square in advance to keep your account
from being frozen.
Square is not the lowest fee credit card company but they offer a breakthrough in the technology
of taking credit cards wherever your business takes you. If accepting customer credit cards
in any location is important to your business, you should certainly sign up for Square.