Just a few years ago, it was quite an investment of upfront capital to set up a credit card processing machine in your store. But today, new technology gives wine bar business owners more options than ever before.
Choosing the Right Payment Processor
Earlier this month, mobile payment processor Square announced that they will change their flat rate payment plans to a “per-swipe” pricing model effective February 1, 2014. What does that mean for your wine business? Well, if your business makes between $10,000 and $21,000 in sales each month, that means your payment processing fees will most likely be going up. In 2012, Square began charging a flat, monthly rate of $275 for businesses that made less than $250,000 per year—and they made a lot of fans that way. Now, they’re returning to the industry-standard rates they started at: a 2.75% charge for every transaction.
Many small business owners aren’t really losing any sleep over the change. Square is easy to use and it’s what they’ll stick with. But others are disappointed by the apparent bait-and-switch—and want to evaluate other options. Whether you’re researching mobile payment processors for the first time or thinking about switching to a new provider, this post will help you go over your payment processor options to find the fit that’s right for you and your business.
With that in mind, here’s a brief guide on the top three payment processors you we’ve had business owners recommend.
- Intuit GoPayment
- PayPal Here
If it’s been awhile since you researched the best ways to accept credit cards, know that things have changed a lot even in just the last three years. Technology has made things REALLY easy. When you sign up for any of these three providers, you’ll receive a free card reader that plugs into the audio jack of your Android or iOS smart phone or tablet. Then, you’ll download the corresponding app and connect it to your bank account to get started.
Now, let’s get to the details…
In 2012, Square (founded by Twitter co-founder Jack Dorsey) had more than three million users, processed $10 billion annually, and formed partnerships with major companies Starbucks and Burberry. It’s not a stretch to say that Square is the most popular brand from the mobile payment processor pack.
Pricing and Fees: According to Square’s new policies, you’ll pay 2.75% of the total transaction cost each time someone swipes their card through your Square reader. If you have to manually enter a transaction, you’ll pay a slightly higher rate of 3.5% plus an additional 15-cent charge.
Getting Paid: Funds are deposited directly into your bank account. Any payments made before 5pm PST will be available the next business day, while all payments made after 5pm PST are available on the second business day.
Perks: Businesses that earn less than $10,000 per month will save money under the new pricing plan. Customers can also pay through their smart phones using Square Wallet, a service that promises “a more personal transaction for you and your customer.” Tech-savvy customers will appreciate this convenient option—and as a result, they’ll be more inclined to continue patronizing your business.
GoPayment comes from Intuit, the maker of software programs like TurboTax and QuickBooks. While they weren’t the first to market, this powerful payment processor comes from a reliable and trusted brand.
Pricing and Fees: GoPayment offers two different pricing plans for small business owners. The first is “Pay Monthly & Save” plan. At $12.95 per month, users enjoy reduced payment processing fees of 1.75% per swiped transaction and 2.75% on keyed transactions. Users who prefer to “Pay As You Go” have no monthly fees, but they do pay a higher rate of 2.75% per swiped transaction and 3.75% on keyed transactions. Additionally, users should be aware that some credit cards and rewards cards fall under Intuit’s broad definition of a “non-qualified transaction” and are subject to an additional 15-cent charge.
Getting Paid: All credit card payments are processed and delivered to your account right away, and you can send receipts to your customers through email or text. Instant payment is definitely one of the best features behind GoPayment.
Perks: GoPayment makes it easy to customize and brand your credit card receipts, add additional employees to your payment acceptance account, and for customers to sign their names using touch-features on your device. It’s an elegant, all-in-one solution to accepting mobile payments from anywhere.
With a long history in the electronic payment industry, PayPal has an established record of innovation, success, and service. Like Square and GoPayment, thePayPal Here system is a mobile credit card reader that allows business owners to accept payments and receive speedy access to funds on the go.
Pricing and Fees: PayPal Here’s pricing structure is similar to those behind GoPayment and Square. When you swipe a customer’s card through the PayPal Here reader, you’ll pay a flat 2.7% transaction fee. Manual transactions are 3.5% of the total purchase amount plus an additional 15 cents. On the surface, these prices are most similar to Square’s new payment plan. However, PayPal often advertises that the one percent cash back bonus available with their debit card effectively makes the rates 1.7% and 2.5%, which aligns closely with GoPayment’s pricing structure.
Getting Paid: When a customer purchases something from you, the funds go straight into your PayPal account. That means no more waiting for funds to process overnight or worrying about transactions clearing over the weekend. If you use the free PayPal debit card, you can withdraw money right away—and you’ll also earn one percent cash back on all purchases you make with the card.
Perks: In addition to making debit card and credit card payments simple, PayPal Here also allows you to accept checks and take payments from customers’ PayPal accounts. Because the money syncs up with your own PayPal account, you can easily transfer it between other bank accounts or use the money to pay for goods and services wherever PayPal is accepted.
Mobile Payment Options: Convenience for Customers—and More Sales for You
Even if you’ve always accepted cash in the past, there’s no reason not to use one of these simple, affordable mobile payment processors—and plenty of reasons that you should.
If you’re concerned that the average 2.5% to 3.5% transaction fees will cut into your bottom line, here’s a secret: you’re losing far more money if you’re turning away customers who only carry plastic. Mobile payment processors make it easy to swipe and pay, removing one more barrier to entry to sipping your fine wines.