Paying with Smart Phones

Smart Phones and Credit Cards, the new trend

We recently talked about how small business owners could add between 1% and 3% to their bottom lines simply by saving swipe fees from charge cards and requiring their customers to pay with green backs rather than plastic.  While that may be an excellent idea, it seems technology may be pushing in the opposite direction.

If you know that your customers are heavy smart phone users, you may begin to hear some of them asking if they can use their smart phone to pay for their purchases.  How, you ask?

Do you recall the Haiti Relief donation campaign?  There were ads encouraging people to plug into their smart phones and make a $10 or more donation. Without going to the dark technical side, smart phone users could simply have their Haiti donation added to their cell phone bill through their carrier, be it AT&T or Verizon.  This is one way to capture monies from smart phones, but there are many other efforts on the horizon.

Bank of America Corp and Visa Inc. are running test programs in NY starting this September.  Customers will install small chips that emit short-distance radio waves into their smart phones, transmitting bank account data when waved near checkout points in stores.

There is also an effort, Square, created by Twitter Inc. co-founder Jack Dorsey, which uses a tiny white attachment and software downloaded onto some phones to allow anyone to accept credit card payments.  PayPal Mobile also has an app that allows money to be transferred by ‘bumping’, (yes, I typed ‘bumping’) smart phones together, which conjures up a lot of strange images.

Mashable just reported that for those small business owners who are looking for a cheap, simple solution for credit card processing, they should be checking out Mophie and Intuit, which is   an all-in-one package that lets you accept payments and process credit cards on your iPhone 3G or 3GS.

This credit card reader alternative consists of Mophie’s iPhone case with a credit card reader at the bottom, and Intuit’s GoPayment app, which takes care of the software side. It also integrates with Intuit’s QuickBooks software, which lets you track invoices and payments.

How does it work? You, a small business owner, apply for a Intuit Merchant Account that will let you process credit cards in a matter of minutes. The customers swipe the card through the reader attached to your iPhone, and sign their names on the iPhone touch screen. Finally, you send the customer an e-mail or text receipt. Intuit claims that its software processes the credit card “within seconds,” after which the funds are deposited into the business’s bank account.

The price of the Complete Credit Card Solution is $179.95 at Apple Retail Stores and soon, claim Intuit and Mophie, on GoPayment, which includes the Intuit merchant account, costs $12.95 per month, with a 1.7 to 3.7% discount rate and $0.30 to $0.34 per transaction fee. One account can enable up to 50 users. Finally, there are no long-term contracts, cancellation, gateway or setup fees.

With the recent introduction of this product, Mophie and Intuit took some of the hype out of Jack Dorsey’s credit card processing solution, Square, especially because Intuit already has an established user base. However, Square still offers a number of advantages over Mophie and Intuit’s solution: a free card reader, no monthly fee, lower transaction fees, and it’s compatible with both iOS and Android devices.

Story Links:

Want to add 1% to 3% to your bottom line?

Paypal Mobile

Mashable’s articles on Mophie and Intuit

Square blog

Mashable’s article on Square Credit Card Scanner

Mophie and Intuit site

Sheila Hibbard

Sheila Hibbard takes the fluff, hype and confusion out of marketing and social media. She provides small business owners with straight forward, no nonsense marketing guidance and techniques that produce results based on her 35 plus years in advertising, communications, research, strategic planning and social media. Author of Marketing Online Made Simple - WHO.

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