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What are the best Mobile Payments Systems

Charles Swan's Profile

I am finance director for a 2-day art show put on by our Rotary Club. What are the pros and cons of the various mobile payment systems out there?

Answers

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

The only one I have heard of is Square Reader. I had my Inventory Manager check into stocking them in our stores a while back.

There are a couple of options and each have variable features. I would look at what features they offer in terms of fees and customer service for the sales you will be producing. The Square Reader can attach to a mobile phone or laptop, you would swipe the card just like normal. The fees I believe are based on volume.

Dmitry Faybysh
Title: CEO
Company: Bankcard Analytics
(CEO, Bankcard Analytics) |

There are many mobile payment systems out there and just about everyone these days are offering mobile. Square is only good if you have low volume of transactions. Its not very secure for one thing. If you have enough volume to justify a merchant account, you should open one. It will give you flexibility and control over your electronic payments.

We partner/resell two mobile companies Authorize.net (owned by Visa) and Charge Anywhere. Both have their own pros/cons...you may want to look for the basic functionality of running a credit, debit, refund, email receipts, etc. These again should primarily be used for low volumes. However, once you have a merchant account, you will have other options to process transactions (i.e. virtual terminal, desktop terminal, POS, shopping cart, etc.)

If you do a large volume of mobile transactions, you should consider getting a mobile terminal. It will connect to a mobile service like AT&T or Verizon. Its the safest way to protect your customers and yourself.

Let me know if you need any specifics.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Dimitry,

You say that Square is "not very secure". What makes it less or more secure than other internet based solutions (including the other two systems you mentioned: Authorize.net and Charge Anywhere)?

Dmitry Faybysh
Title: CEO
Company: Bankcard Analytics
(CEO, Bankcard Analytics) |

What i was trying to say...as far as readers (square, auth.net, charge anywhere, etc)...they are all about the same...the main difference is you may get a better rate if you have your own merchant account (vs. square, you are part of an aggregator). So if your transaction volumes are low, its not a big deal. However, if you do high volume on a mobile device, i would suggest you get a mobile terminal (not a card reader for your phone).

The terminals will have some or all the following security protocols and certifications:
1. SSL 3.0 and/or TLS 1.0 Encryption
2. PCI-DSS validated payment application security
3. PCI PTS 3.0 Certifications
4. EMV (smart cards/chip readers) level 1 & 2 certifications
5. 3DES encryption, DUKPT key management

These are items i pulled off one of the terminals we use. Most of these are industry standard acronyms that basically translate into having your data and your customers data secured and protected while processing payments. These cannot be built into a card reader like a square or others.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Your first statement is completely accurate.

Your last statement is not as accurate.

1. IOS & Android have SSL and TLS,
2. PCI (industry standard) is/can be programmed into the process, thus making "smart phone" applications compliant. In addition, not all hardware may be PCI PTS complaint.
3. EMV is built into the actual card reader unit and is now available for "smart phones" and
4. 3DES is also in IOS and Android.

Dmitry Faybysh
Title: CEO
Company: Bankcard Analytics
(CEO, Bankcard Analytics) |

That's an interesting view...i guess we disagree...

if you are buying terminals that are not pci compliant or do not have an EMV slot...you probably should not be buying them. i am not sure who would even sell a terminal that is not PCI or EMV compliant these days unless you are getting them on ebay (older models). EMV will be required by Oct 2015 and if you accept a card that has a chip and do not use an EMV slot, your rate gets downgraded so now the cell phone card readers become even more expensive.

i am not saying not to use a phone reader...all i am saying is if you do any volume, you should open a merchant account because you will get better pricing (along with many other benefits) and in my opinion terminals and other forms of payment acceptance are more secure than a reader especially with the recent breaches that happened at target, home depot, etc...

Charles Swan
Title: CFO
Company: The Virtual CFO
(CFO, The Virtual CFO) |

Thank you all. This confirms my suspicions. I have used Square in the past, and sometimes had to run the card several times, or, in a pinch, have a high school volunteer run the transactions.

Christine Speedy
Title: Global Business Development
Company: CenPOS
(Global Business Development, CenPOS) |

Assuming you only accept credit cards for this event only, then for YOUR situation, a regular merchant account and all that it entails, including monthly fees. annual PCI fee etc, is problematic. The Square model is 'use it when you need it and zero fees the rest of the time'. There are very few solutions that do that and I can't think of any others offhand that are not startups.
The size and shape of the mobile swiper area does impact the likelihood of a good swipe, which is why Square users complain about multiple swipes needed.

If you already have a merchant account, virtually all of them have a mobile solution. I would stick with whatever they have, and not seek other solutions due to the overall low volume.

Common features and differences:
All in one price deals:
- Usually free to get started. deposits sales net of fees in 3-5 days, manual transfer to bank may be required.
- Each reader = a unique account.
- May also have a daily limit for processing, or a maximum payout for the week- could be a problem in your situation. (These terms are buried in the fine print.).
- Reconciliation can be more cumbersome.
- Aggregation- it's possible your company name is not on the consumer credit card statement

Your merchant account with mobile reader:
- Deposits in 1-2 business days to your bank account automatically. Fees paid via ACH monthly.
- Card readers- multiple readers may be added to one account
- Fees: One time set up fees range from free to $200.
Transaction fees- read the fine print and terms and conditions. Virtually all the 'all in one price' (Square) deals will have extra conditions
- Security- remotely add and remove users on demand; restrict user permissions based on roles.
- Reconciliation- remotely access reports for all users with one login
- Swipers: Generally more reliable card readers requiring fewer re-swipes.

When do you justify opening a merchant account vs using something like Square? Consider dollar and transaction volume. If you hope to bring in $5000 and it's a one time event, choose an all in one solution. I have a customer that brings in over $250,000 in one night at their event. Overall it's low number of transactions, but these are big donors so they need to make it frictionless for the big donors to pay. They use their own merchant account and enterprise payment gateway. Any time big money is involved, I'd shy away from Square.

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