If you’re a small business and you need to save money, listen up to this.
Cheaper options for merchant processing fees
A company I’ve talked about a few times recently, Square, has become a huge player in allowing any small business to take credit card payments on the go.
Square offers a plug-in device that can be used with most Apple and Android devices to process credit card transactions anytime, anywhere. There’s no monthly fee, no contract and the plug-in device itself is free. You simply pay a merchant fee of 2.75% on every swiped transaction.
Another alternative is one from PayPal called PayPal Here that works with Apple iOS and Android products. PayPal has introduced a new wrinkle with their reader: If you do more debit card transactions than credit card transactions, you can lower your transaction cost from 2.7% to about 1.7%.
Meanwhile, a third competitor is Intuit’s GoPayment. It’s another free piece of hardware for Android, iPhone and BlackBerry. The merchant fee is 2.7% for low-volume users and again you can process payments right there on the spot.
Finally, the latest entrant to the marketplace is Amazon Local Register. Swiped transactions are 2.5%.
I love these new developments because they can be a potential saver for those with irregular transactions. Yet they’re not the best way if you do high dollar ticket transactions. In that case, you may want to look at the merchant processing offers through Sam’s Club or Costco Wholesale.
But the bigger question is this: Will these competitors force traditional merchant processors to lower their rate for merchant clear on services in mobile businesses? Because right now, mobile businesses get eaten alive.