When PayPal started doing business in 2000, it began a trend of not using the two primary cashless payment methods: Visa and MasterCard. Today there are a number of other noncash payment processors, and technology has created the ability to accept payments nearly any place, any time. Technological advances and competition in the industry have made the cost of accepting noncash payments more affordable for businesses that can tailor the service to their unique needs.
Getting Started
Setting up merchant credit card processing accounts with large processors such as Visa and MasterCard requires lengthy credit approval, and you must lease their equipment or pay monthly minimum fees. Accepting online payments can cost significantly more because these processors gauge online businesses as more risky.
Formidable competitors, however, have emerged to compete for your credit card and noncash payment processing business, particularly in the online realm. PayPal and its peers, such as Amazon Payments, Google Checkout, and Intuit Payment Solutions, all take about 10 minutes to apply for and 24 to 48 hours to completely set up.
As important, the cost of processing transactions doesn’t normally involve a monthly minimum fee, and there are typically no high setup fees. Single-transaction fees for a small business using Amazon Payments can be as low as 1.59 percent, with no monthly cost to use the service. Large credit card processing gateways charge small businesses 3 percent to 4 percent on top of several significant monthly transaction processing fees. Onetime setup costs for a traditional payment processor can be $350 or more.
Going Mobile
Noncash payment processing solutions allow multiple platforms with which you can accept payments. These include devices that have Web access, such as cell phones and smartphones, netbooks, laptops, and desktop computers. There are numerous applications for the Apple iPhone, iPad, and Google Android phones that allow you to create invoices, process credit cards, and even print receipts through a Bluetooth-enabled reader.
Accepting payments with common computer and communication devices allows businesses to accept payments for services they render at remote locations. For example, say you own a landscaping business and you deal with clients onsite at their homes. Instead of requiring them to write a check for payment, you can use a smartphone with a Bluetooth credit card reader and printer to accept payment and print (or e-mail) a receipt. It is ideal for artists, craftsmen, and others who sell at street fairs, art shows, and other gatherings where there is no landline connection to the Internet.
Examples of affordable remote payment solutions are Square by Square Inc. for the iPhone, iPad, and Google Android that offers a small credit card swiping attachment, Intuit’s GoPayment processing system that relies on any cell phone that has an Internet browser, and Planetauthorize that currently offers applications for many popular smartphone operating systems.
These examples represent a broad range of what is available for mobile payment gateway solutions for small businesses today. If your business can benefit by having the flexibility of accepting credit cards on a mobile device, there is a solution that is likely to fit your business.
Sam Thacker is a partner in Austin, Texas–based Business Finance Solutions.
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