The Merchant Services & Business Insider

Quickbooks Merchant Services is a very popular setup for most businesses.  Want to understand why?  Watch this 2.5 minute video that shows the power of Quickbooks integrated merchant services solutions.

The Washington Post published an article on August 23rd, entitled “Will mobile payment fees reach zero?”  Apparently there is a brand new company called LevelUp that offers free mobile payment processing.  They currently have 3,000 companies across the United States processing payments through them.  This probably means this company is incredibly small, unprofitable and venture funded.  As far as I can tell they are hinging the success of their business model on being able to sell customer transaction data to other companies as well as sell advertising.  They essentially have to eat the several percent transaction  fees that companies like Visa, MasterCard, American Express, and Discover charge and then more than make up for the cost of that by selling the services above.  This is a high risk business plan that costs a lot of money to setup – yet it certainly is very interesting.  The question is – is this business a viable and secure way to accept mobile merchant service payments?  Time will tell.

On August 22nd eBay, parent company of PayPal.com, announced that it had expanded a partnership with Discover Card that will enable PayPay customer to make purchases using their PayPal accounts at any merchant that accepts Discover Card.  This is a substantial partnership given DiscoverCard’s 95% penetration into the U.S. market.  This feature enables PayPal customers to have the ability to fully mange their digital wallets – giving them the ability to pay through PayPal, but fund their purchases through credit card, debit card, bank account or Bill Me Later.  This merchant service rollout is schedule for the second quarter of 2013.

Prior to and after the rollout, all PayPal customers will be given the opportunity to request a PayPal credit card that can be swiped jsut like any traidtional credi card.   As the market evoles PayPay will give merchants the option to use a callphone number and PIN instead of swiping a card.  This move is how PayPal plans to expand and differentiate in the ecommerce, mobile ecommerce/digital wallet hyper-vertials of the merchant services processing industry.

Restaurant merchant services options have a wide degree of solutions for your business.  What you pick can effect your transaction charges with your merchant services processor.  In addition, what you pick can have a significant effect, on your revenue, and the ease of managing your accounts receivable and accounting.

For example, if you are a fast-food restaurant you will need to have a very fast payment processing system.  For example, fast food provider’s such as Wendy’s have done tests and have figured out that every additional second of waiting at the drive through window can cost a franchise repeat customers and with long enough of a wait, a set of franchises, have lost millions of dollars in revenue by serving a customers on average, just 10 seconds beyond the delivery target.  That 10 second delay – could be caused by slow payment processing equipment.

Restaurants can have similar experiences by slowing down server responsiveness by having slow order taking and payment processing systems.  As a restaurant, you need to have a best merchant services solution for your business.

So what are the best payment processing options for your food service business?

• PCCharge – a computer-based point of sale system that can synchronize many retail locations or registers within a location.  This system is considered pretty easy to integrate and is very good for more advanced restaurant merchant service operations.
• Verfione VX510 – a quick processing hardware solution that allows processing in just a few seconds.
• Verifone VX570 –  a user-friendly restaurant merchant terminal that has a built in thermal printer.  It is the same as the VX510 but it offers some more advanced features.
• Nurit 8020 – a compact and versatile payment terminal with a fast thermal printer and a built in pin pad for debit card transactions.  This terminal is great for family restaurants.
• Hypercom T7P – an older terminal that boasts fast processing and receipt printing times. This terminal is great for family restaurants.
• First Data FD100 – a  popular touch screen credit card restaurant merchant terminal.  This terminal is better for users who are not as computer savvy.

Mobile merchant services apps are taking the merchant services industry by storm. The question is which mobile merchant service solution is right for your business. Here a the pros and cons of the various payment solutions according to research done my Entrepreneur Magazine.

Square
Square which launched in 2010 is one of the most popular mobile payment systems. Its card reader is a small, white square that plugs into a Smart Phone or Tablet.

Pros: it is an easy to navigate design with big clearly labeled buttons which can help simplify the checkout process for the cashier.
It also offers an online dashboard to view sales trends. Lastly, the “Pay with Square” feature lets patrons open a virtual tab and pay via their smartphones without having to swipe a credit card.

Cons: Square customer support is terrible and it is near 100% automated. This means that if you are having trouble accepting payments from your customers you are pretty much out of luck. Setting up custom features, such as sales tax rates is very difficult for non tech-savvy users.

Price: Square has a 2.75% swipe fee and for cards in hand transactions or a 5.77% plus 15 cent per transaction fee for card transactions that are keyed in manually.

Who should use it: Business owners who are just getting started and want a moderately easy-to-use mobile payments service should consider Square. 

Intuit GoPayment
Mountain View,  CA (the same city as Google, Inc.), this mobile merchant services solution is built specifically to work with its QuickBooks accounting software.

Pros: If you rely on Quickbooks this solution is really nice becuase of its easy integration with QuickBooks.  This solution works well for PC as well as MAC user.  The process is automatic an easy. The solution  also offers automatic, location-based sales tax calculations for purchases based on the location of the customer.

Cons: First, the card reader is large and bulky. Ironically, the Intuit GoPayment doesn’t make it easy to key in cash payments, so that you will have to find a way to manually import into Quickbooks.

Price: For $12.95 per month, pllus a per transaction from 2.7 percent to 1.7 percent and from 3.7 percent to 2.7 percent for keyed rates.  

Who should use it: For dedicated QuickBooks users, Intuit GoPayment offers a good amount of time saved. Yet companies that take cash as well as electronic payments should want to avoid this solution.

PayAnywhere
By Troy, Michigan – merchant services  processing North American Bancard, PayAnywhere is the leading mobile merchant services solution and has been in business since 1992 — longer than any of the other services.

Pros: PayAnywhere offers over-the-phone support, with separate phone lines for tech support and customer service.  The customer support is the best in the mobile merchant services arena.  There is also a live chat option on the PayAnyWhere website, plus comprehensive video tutorials.  The system also supports blackberry devices which is rare.

Cons: The printing feature of Pay AnyWhere wroks with Apple AirPrint devices or Star Thermal Printers – if you want to print you will need one of those printers.

Price: PayAnywhere charges 2.69 percent per swipe, with 6.18 percent plus a 19-cent transaction fee for keyed transactions.

Who should use it: Most merchants – businesses that want reliable and the best served mobile payment solution.  24/7 customer support is great.

PayPal Here

Pros: PayPal Here accepts the widest range of payments, from credit card to debit card and echeck via use or a smartphone or tablet camera.

Cons: There is no dedicated app for the iPad or other tablets.

Price: PayPal charges 2.7 percent per card swipe and 6,2 percent plus 15 cents for keyed transactions.

Who should use it: Very small businesses that are already using PayPal.

Merchants often ask us how to get the best deal on their merchant services processing rates. We always give the same answer interchange plus pricing and a long term contract.

Here is how it works: Visa, MasterCard, American Express and Discover all charge merchant services processors interchange rates to process transactions. There are the exact same costs and everyone who accepts electronic payments has to pay these. Interchange plus pricing allows your merchant services provider to make a very small profit on accepting your transactions, a .05% markup is fine. Then ask your merchant services provider to guarantee no pricing increase on the plus part of your interchange plus pricing for 3 years. Then you are locked in at a great rate for 3 years. This is merchant services rates done right!

2012 is the year of mobile merchant services expansion within the merchant services industry. Mobile merchant services also known as wireless merchant services has overtaken Ecommerce merchant services as the growth engine of merchant services.

In 2012 these mobile payment processing systems have grown to prominence within the industry.

1. Verifone VX670
2. Way Systems
3. Square
4. PayPal’s Mobile Plugin
5. iPhone Mobile App Plugins
6. iPad Mobile App Plugins
7. Droid Mobile App Plugins

At Choice Merchant Services we have noticed that in 2012 1 in 4 of our new merchant services processing requests are for wireless merchant services, in 2011 that number was more like 1 in 10

Financial Transaction Services (FTS), a full-service provider of merchant services announced today that they are acquiring Marathon Solutions, Inc. (MSI), a provider of electronic payment processing solutions based in Mission, Kansas.

Together this will help both companies play a bigger role in the business to business merchant services processing. Now both companies are undergoing the difficult integration of their merchant services processing businesses.

I have been working in the merchant device industry since 2005 and as I think back on it it is funny see how much it has changed since then.

Here are some examples about how the payment processing industry has changed.

1. In 2005 we had requests come in weekly for mail order merchant services. Today, mail order is a thing of the past.

2. In 2005 Smart Phones did not exist. Mobile merchant services was referred to as witless merchant services and the only companies that wanted wirlessless merchant services were charter fishing companies. Back then, people used services like dial pay, or a wireless merchant equipment that was big and bulky by today’s standards. Today, Choice Merchant Services gives our merchants free merchant equipment that plus direcly into a iPhone, iPad, or Droid. We get many new requests for this new form of mobile merchant services weekly.

3. In 2005, most merchants got merchant services pricing that had unique qualified, mid-qualified, and non-qualified rates. Today, most merchants request interchange plus pricing – it is almost always a better deal.

In 2012 we are the only provider that gives away free merchant equipment to ur providers and offers merchant services processing rates that start at 1.05%. In 2005 things were not this good for merchants. It seems that 2012 is better than 2005 for those merchant that do merchant services processing.