Square has soared up to over 5 billion dollars per year in payment card transactions, a phenomenal figure for sure and PayPal has claimed 2000+ signups per day after their recent launch into the retail brick & mortar marketplace.
The main reason for the huge dollar volume being processed by Square is that it was developed for P2P or person-to-person payments and it works without requiring a traditional merchant account.
PayPal’s sudden deployment and recent sign-up campaign success is due in large part to the existing infrastructure that PayPal has developed and has in place as a result of their ownership and operation by eBay.
Both solutions fulfill a need. However, they are not designed for a real business, a business requiring point-of-sale features that integrate with QuickBooks, SAP, Oracle, Sage etc. and that also enable reports, inventory and transaction monitoring and control and much more.
The foremost concern for a business is cost. A merchant is in business to make money and that business is their livelihood, that’s how they feed their family. Therefore, any business with significant sales volume finds the payment processing cost to be critical.
The basic cost for Square is 2.75%, and PayPal basic is 2.70%.
So lets do the math, a merchant doing $25,000 per month using Square and swiping card present transactions pays around $687.50 (keyed-in transactions cost 3.50% + $0.15 cents per transaction, anything accepted over $1000 is held for 30 days on keyed-in transactions).
$50,000 would cost $1375 and $100,000 in sales would cost around $2750. PayPal would be about $2700+ (plus additional monthly fees in 3 different versions; a virtual terminal is available at 3.1% + $0.30 cents per transaction).
PayPal can also link to an existing merchant account for a $179.00 set-up fee and $19.95 per month with 500 free transactions.
A merchant processing $100,000 or more can save $700-$750 per month when being charged a more reasonable 1.99%, which saves around $9000-$10,000 each year. That’s a lot of money, money that can be redirected elsewhere to inventory, marketing, or even a vacation.
If you search long enough you’ll find a PayPal tiered volume discount rate structure you can apply for starting at 2.9% + $0.30 up to $3000 per month, 2.5% + $0.30, $3000-$10,000 per month, $10,000 + 2.2% + $0.30.
Not having to qualify for a typical merchant account means more risk, which is why the pricing is higher, and there are parameters such as volume limitations and payment holds and much more when using Square or PayPal.
Today’s merchants should offer a compelling and differentiated service experience in their stores.
Mobile POS (mPOS) solutions such as the enterprise edition of ABC Mobile Pay support a variety of sales floor functionalities, including inventory lookup and management, customer data acquisition and line busting. The solution also facilitates remote printing and it can be used with legacy system printers or wireless printers.
Currently available peripherals such as bar-code scanners, printers, cash drawers, keyboards, mobile card readers, audio/video streaming devices and other accessories for Apple iOS and Android devices are sophisticated and operate intuitively. These devices offer a new option for in-store mobility, customer interaction and relationship development.
ABC Mobile Pay is a cloud-based POS solution, which can handle sales in the store and online. Because it shares the inventory database, all of the sales personnel have access to the same information and the database tracks sales and transactions in real time for inventory control, management and accounting purposes.
Freed up by the mobile devices, associates can roam the store for line busting inside or outside and can offer parking lot or drive-through checkout. Servers and employees are able to accept payments at the table in a restaurant or at the door in a retail or delivery environment.
A mobile POS payment solution should connect to the point-of-sale system based in the cloud. The mobile device is simply an extension of the POS, communicating with the central database regarding transactions and inventories. The payment should seamlessly integrate with the order the customer has placed, whether it’s online, in the restaurant or within the retailer’s four brick walls.
Merchants can accept payments at any time while developing deeper customer relationships. For instance merchants can capture the customer’s email address to send a receipt and the customer can opt-in to join a loyalty program or receive a newsletter. There are more things that merchants can do with the customer to provide a unique and satisfying buying experience that they couldn’t do before.
A busy merchant operating a thriving business now has a viable mobile POS (mPOS) payment option to Square and PayPal. By utilizing an enterprise level mobile POS solution such as the ABC Mobile Pay application on an iPhone, iPod, iPad or other mobile device merchants can increase sales and develop loyal relationships cementing emotional bonds that will have customers raving and spreading the good word about their favorite tech savvy merchant.
Rick Berry is CEO of ABC Mobile Pay. ABC processes credit card transactions such as Visa and MasterCard as well as other forms of payment for our merchant-partners using the very finest ‘state-of-the-art’ hardware such as Apple’s iPad and iPhone, and custom software, which enables the merchant-partner to realize the most robust profits possible for their business.