biz notes :: mobile payments part one

24 Jan

photo credit: oh, hello friend: you are loved.

As makers, and essentially retailers, most of us started selling our handmade products on websites such as Etsy, Cargoh, Big Cartel, Folksy, and Dawanda to name a few. With the help of PayPal, we were in a position to connect with buyers from all over the world and process credit card payments at anytime of the day. From online sales, we naturally move to selling at local craft fairs where we only accepted cash of course! I mean, we are just “small” businesses and surely couldn’t afford one of those fancy machines!

Well, times are a changing and I’m here to talk about mobile payment processing options. In 2009, I started increasing the number of markets I participated in and wanted to provide my customers with a credit card option. I signed up for a system with Moneris which worked well, but they had a high initial set up costs, regular monthly fees, strict cancellation fees, and contracts (fee heavy!). That being said, they provided great customer service, their mobile credit card machines always worked and provided me with a professional appearance. In the end, the overall cost was just too high and did make it feasible as I moved to only participating in fairs during the holiday season. (see other traditional providers: Chase)

Over the past few years, the field of credit card processing has seen a huge growth with the use of smartphones and tablet computers. Five systems that we are going to talk briefly about include Square, Kudos, ProPay (part one), Beanstream and Virtual PayPal Terminal (part two).

Square: Developed by the team at Twitter, it is currently only available in the US, but there are rumours that they are preparing to launch in Canada. Fingers crossed!

Kudos: This is the system i am currently using. Using Pivotal Payments to process the transactions, they are an US company with offices in Canada. The reader ($100 -> there is a 50% off sale now) attaches to your smartphone and fees are 2.7% + $0.20 per swipe with no monthly fees. You will need to complete a form for a merchant account with Pivotal Payments and provide a void cheque to show your banking details. Once you are approved, download the smartphone app and upload your details!

I used this for OOAK Vancouver and some issues that I run into included:

  • Kudos released a new version of the app which did not operate properly, so I was struggling to use this during one of my busiest times.
  • Customers that do not have smartphones struggled to sign their names on the screen and enter their information (can be avoided by purchasing a tablet stylus and will be moving to an iPad).
  • Fear of people dropping the device, damage or worst case scenario, running off with it.

ProPay: With this system, you can process credit cards by using your mobile phone or computer. Funds are deposited into your ProPay account which can then be transferred to a chequing account. Two plans are available: premium plus ($59.95) + platinum ($79.95 annual fee) – no monthly fees + no contract. There is a reactivation fee of $50 though and you can view their transaction fees here depending on which credit cards you accept.

{ this is not a sponsored post + is geared towards Canadian users :: also keep in mind that all mobile payment options are not 100% PCI compliant, so you may run the risk of accepting cards which may be fraudulent + you are not able to take full advantage of the pin & chip technology }

As always, this is an open discussion and I don’t have personal experience with all of these systems. If you wish to share your own experiences or have any questions, please leave a comment! Stay tuned for part two where we coverBeanstream and Virtual PayPal Terminal!

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3 Responses to “biz notes :: mobile payments part one”

  1. Sandy January 24, 2012 at 17:17 #

    Great info. I look forward to part two so that i can compare and make a decision. I also struggle with the question credit or no credit and simply can justify a monthly fee in the slower seasons. Thanks guys!

    • lotus events January 24, 2012 at 17:20 #

      Hi Sandy! I don’t think I have ever lost a sale to somebody because I didn’t have a credit card option. However, it definitely encourages the “spender” to purchase more and is absolutely necessary (in my opinion) for shows like One of a Kind as you are reaching more of a mainstream shopper.

  2. Sabrina January 25, 2012 at 06:02 #

    Great article! I’ve been looking into getting mobile credit card options and I’ve been waiting patiently for Square to come to Canada!

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