December 14, 2011
Can Anyone Catch Square With Their $4 Billion + a Month Head Start?
The answer probably lies somewhere between PayPal and another mobile POS payment solution.
If you’re the owner or manager of a small to medium sized business, a key part of our national economic engine, then you recognize the importance of mobile and using today’s technology; and you want to utilize it and capitalize on the opportunity that it presents, however you’re not quite clear on a few things.
You’ve tried PayPal sometime back and you were astonished at what you found out.
In order to use PayPal you must first accept their terms of service.
By doing so, you in effect waive your rights to credit card consumer protection laws and you acknowledge that you cannot issue a chargeback for unauthorized use of your credit card and PayPal account.
If you do, they have the right to limit your account.
‘Phishing’ complaints signify the fraud problem to be rampant and your account can easily be compromised if you’re not very careful.
If a criminal accesses your account, PayPal will hold you monetarily and legally responsible.
PayPal can, will, and has in the past, completely cleaned out customer accounts, including checking and/or savings accounts, without any appeals process available.
Buried in the fine print of their “Terms of Service”, they disclose to you that PayPal can close your account for any reason what so ever, or no reason, and then you have to wait 180 days to get your money.
Think that’ll never happen? Think again. That’s what everyone thinks until it happens to them. It’s hard to run a business that way, that’s for sure.
If you’re a fine up-standing individual with hundreds of successful transactions, and someone pays you with a stolen credit card, your account is immediately flagged as being involved in “criminal behavior” and any money in that account can be, and often is, frozen and confiscated.
If a customer disputes the charge, the same thing has happened.
PayPal claims that they will fight chargebacks, however horror stories to the contrary abound.
There are websites claiming over 10,000,000 visitors dedicated to exposing how bad the PayPal customer service is. (See PayPalSucks.com)
Square seems to be headed in a slightly more customer and business friendly direction, or at least they may be in the future, however they’re very pricey for a business.
Card present swipe rates are 2.75%, card-not-present (CNP) rates are 3.5% + $0.15 per transaction.
Processing limits make conducting a busy brick & mortar business a real challenge, to say the least. For instance, as a first time or new Square user, you can’t process over $1000 in transactions per week.
All funds processed in one week over $1000 will be held for an undetermined amount of time.
If your transactions are card-not-present (CNP) then everything over the $1000 a week threshold will be frozen and unavailable for 30 days.
If you had a $12,000 sale, you may get $1000 put into your account and you may not receive the $11,000 balance for at least 30 days – very challenging for almost any business.
Although Square is willing to work with you by raising those limits, for a business that processes over $1000 right out of the gate, Square is distasteful as an alternative mobile payment solution for almost any busy business.
Large ticket sales are frozen and funds are unavailable for an undetermined amount of time as well.
Although Square recently exploded onto the payments scene, other mobile POS payment solutions that provide more traditional methods of payment transaction processing, such as ABC Mobile Pay, have enabled the technology to begin to become mainstream in the frenetic payments landscape.
By utilizing rich POS (Point-Of-Sale) features and a robust mobile platform, a merchant can utilize mobile without having to worry about processing limits, frozen funds, ticket sizes and various other headaches or impediments.
A busy merchant during this bustling holiday season can capture impulse decisions; provide a unique and pleasant customer experience and save invaluable time for both merchant and customer, by implementing a robust mobile POS payment solution.
Like Apple and Nordstrom, to name but a couple, merchants are utilizing mobile phones and other mobile devices such as iPods, iPads and other tablets and devices to revolutionize how we live, shop and even behave.
This new technology and these devices enable not only payment processing, they also provide features such as inventory control and barcode scanning, CRM (Customer Relationship Management), promotions, discounts and specials that can be marketed to your customers via email or SMS text messaging.
Signature and photo capture on the mobile device enables receipts to be printed and/or emailed instantaneously.
This is part of what makes the experience such a game-changer.
Mobile in retail has received a spectacular reception because it produces a much more pleasing customer experience for one reason.
It enables a purchase to be made anywhere on site while capitalizing on the impulse buying decision.
For instance, a customer in a dressing room with a number of different items or sizes now instantaneously checks out right when the impulse develops.
No gathering up of packages and trudging over to a waiting line of bustling customers at the point-of-sale, where by the time the clerk gets to them, an impulse decision may evaporate and a sale can be lost.
The customer now simply hands the attending sales clerk the desired item(s), the clerk scans the product with a mobile barcode scanner and payment card-swiping device (which encases an iPod or iPhone).
Then the clerk swipes the payment card and hands the device to the customer, the signature is captured (and photo if desired) on the device and it’s automatically embedded on the printed and/or emailed receipt.
Of major concern to both small regional businesses and large national chain stores alike, is the ability for the mobile payment solution to integrate into existing back-end accounting/bookkeeping software solutions such as QuickBooks, SAP, Oracle, and SAGE, which can now be easily accomplished with the proper solution.
The mobile POS payment solution that a business decides to go with should seamlessly integrate into any front-end point-of-sale software solution such as Micros or Aloha, when required.
Ideally the mobile payment application or solution should also be customizable as well, in order to provide valuable feature sets that are specific to an industry or niche market.
We have recently seen PayPal fire a shot over the bow of retail payments in the brick and mortar space by implementing a POS solution that operates on their platform.
Educated speculation says we will see Square improve and add features designed to attract the business sector and the race is on.
We expect to see different mobile payment variations with feature sets designed specifically for niche markets. Value will be developed by a few select mobile payment solution providers, who will all compete for market share with newer iterations of both PayPal, Square and/or other mobile POS payment applications or solutions yet to be heard of.
Rick Berry is president/CEO of ABC Mobile Pay, a mobile technology provider based in Valencia, CA. ABC Mobile Pay provides white labeled/private labeled mobile payment solutions to Processors, ISOs, Agents, Financial Institutions and Resellers of all types and sizes around the world.