Payments On the Go – Turning Your Mobile Device Into a Cash Register

Have you considered dispensing with your cash register or offering more flexible payment options for your customers?

If you’ve ever purchased anything from an Apple store, you’ll recall that they don’t have a single cash register on the premises. Instead, all payment transactions are conducted by Apple’s employees using mobile devices.

But Apple isn’t the only one in on the act. More and more small business owners are turning to mobile payment platforms on site and on the road. And with smartphone use at an all-time high, new technology is making it much easier for small business owners to process credit card payments via smartphones and tablets.

For local businesses, particularly those that sell products on the go – at fairs, in restaurants, concession stands, and door-to-door – these payment solutions offer small businesses reliable options for accepting payments other than checks and cash.

When it comes to accepting payments via mobile devices, the following platforms are particularly geared towards small local businesses:

1. “Square”

Used in more than 20,000 retail locations nationwide and processing more than $5 billion transactions per year, the market pioneer and current leader is Square.

How it works: Square is a very simple concept. Using a free app and card reader (or dongle) that plugs into an iPhone, iPad or Android device, businesses and their employees can collect payments by swiping cards through the device. Once accepted, the customer signs the touch screen with either their finger or a stylus, and can add a tip. A receipt is sent to the customer via text or email. The cost? Square charges merchants a 2.75 percent fee per swipe for most major credit cards and funds are deposited the next day.

Note that if you accept more than $1,000 in card-not-present payments during any seven-day period, Square will defer depositing the amount in excess of $1,000 for 30 days (more here). Square also offers Square Register, which can convert any iPad into an all-in-one cash register.

2. Intuit GoPayment

Intuit GoPayment is similar in concept to Square. Merchants get a free app and card reader that can be plugged into a smartphone or tablet device. It also synchronizes with QuickBooks, making it easy to manage your sales records; you can also buy add-ons that allow you to print receipts. Intuit’s pricing model is also slightly different than Square’s, with two options: 1) A 2.7 percent fee per-swipe (3.7 percent for keyed transactions), or 2) merchants can pay a monthly fee and pay a lower per-swipe rate, maybe a better option, depending on how you use the reader.

3. PayPal Here

Launched earlier this year, PayPal Here includes a free credit card reader and app, as well as a range of add-ons. For example, merchants can use their device’s camera to scan checks and cards (useful if you don’t have your card reader on you), as well as access their own PayPal account to make purchases. PayPal Here charges slightly less per swipe than its competitors at 2.7 percent. It also purports to be more secure, thanks to card reader technology that encrypts cardholder information before it is transmitted to the device.

The Bottom Line

This is just a brief overview of some of the players. A quick search online will deliver a host of reviews that can help you make an informed decisions about which platform makes sense for your needs. It’s also a good idea to talk to other business owners to gauge their experience of these platforms. The SBA Community Discussion Boards are a great place to start.

Talk to your accountant, too, so you have a clear view of how a mobile payment platform will fit into your cash flow management processes.

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About the Author

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley