ISO & Agent Guest Column
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 accomplished its sudden deployment and recently successful
campaign to sign up merchants by having an established infrastructure it
developed via its relationship with its parent company, eBay Inc.
Both companies fulfill a need however they are not designed for real
businesses that require point-of-sale features that integrate with QuickBooks,
SAP, Oracle, Sage and others. Merchants also need technology that delivers
reports, controls inventory and monitors transactions.
But 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.
Meanwhile, the basic cost for Square is 2.75%, and PayPal basic is
2.70%.
So let’s do the math. A merchant with $25,000 per month in transactions
that uses Square to swipe card-present transactions pays around $687.50. That’s
because keyed-in transactions cost 3.5% plus 15 cents per transaction. So,
$50,000 would cost $1,375, and $100,000 in sales would cost around $2,750. Any
keyed-in transaction of more $1,000 is held for 30 days.
PayPal would be about $2,700, plus additional monthly fees in three
versions. A virtual terminal is available at 3.1% plus 30 cents per
transaction.
PayPal can also link to an existing merchant account for a $179 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 charged a more reasonable 1.99%, which saves around $9,000 to $10,000 each
year. That’s a lot of money; money merchants can redirect 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% + 30 cents up to
$3000 per month, 2.5% plus 30 cents, $3000 to $10,000 per month, $10,000 plus
2.2% plus 30 cents.
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.
But Square and PayPal
aside, today’s merchant must be able to offer a compelling and
differentiated service experience in their stores.
Mobile POS (mPOS) solutions such as the enterprise edition of ABC
Mobile Pay, http://www.abcprocessing.com/
supports a variety of sales floor functions, including inventory lookup and
management, customer data acquisition, and line busting, which means sales
associates check out customers on handheld devices to shorten the lines at the
registers. It also facilitates remote printing and works with legacy system
printers or wireless printers.
Peripherals, such as bar-code scanners, printers, cash drawers,
keyboards, mobile card readers, audio and video streaming devices, and accessories
for Apple and Android devices, are sophisticated and operate intuitively. The
devices offer a new option for in-store mobility, customer interaction and
relationship development.
ABC Mobile Pay is a cloud-based POS solution and 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 instantaneously for inventory control, management and
accounting.
Freed up by the mobile devices, associates may roam the store for
line busting inside or outside and can offer parking lot or drive-through
checkout. Servers and sales associates may accept payments at the table in a
restaurant or at the door in a store or on a delivery.
Mobile POS equipment 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, a Los Angeles, CA-based
provider. Reach at rick@abcmobilepay.com
- 661-259-2185 – http://www.abcmobilepay.com
