Credit Card Payments Via Smartphones

How do you accept payments?

In Toronto there are a multitude of booksellers of different types and sizes: some are huge multi-story stores with thousands of books, DVDs, and music; others are small storefronts whose square footage can be measured in tens of feet.  Then there are the individuals who set up on a street corner and sell books out of a cart or off of a blanket.  All accept various means of payment.  The individual sellers only accept cash as payment. After all, for a credit card machine you need a phone line, somewhere to plug in the terminal, all that stuff.  Or at least, you used to.  Not any more thanks to the ubiquity of smart phones and the emergence of small credit card readers that plug into them.

square-card-readerAbout a year ago I was in San Francisco with my wife.  One day we went into a small clothing store in the Mission District and she found something that she wanted to buy.  We went to the cashier to pay, and she decided to use a credit card rather than cash.  Instead of there being a large cash register with a credit card processing machine alongside or even a book to write up receipts by hand and a manual credit card imprint machine all that the cashier had was an iPhone with a little cube plugged into the headphone port on top.  She entered the cost of the item into her phone, swiped the credit card, and emailed the receipt.  Done.  Simple.

The retailer was using Square, a mobile payment system developed by Jack Dorsey, the creator of Twitter.  This is one of several mobile payment solutions that have been developed in recent years, including PayPal’s mobile credit card reader.  Most of these work on the same business model: you install an app on your phone (or tablet) and then can either manually enter credit card numbers or buy the card reader accessory (which is amazingly inexpensive, it’s gotta be a loss-leader) and you start accepting payments.  Rather than paying a monthly fee to the provider you are paying a percentage of each sale.  Some do allow you to sign up for subscription services which lower the percentage, however.

Just imagine: you decide you want to sell your books at a fair, at a flea market, at any event, now you are no longer restricted to accepting cash payment only.  This gives consumers more options and no longer restricts buyers to just the cash that they might have on hand if you are selling something they want that is slightly more than they had anticipated spending. The rise of mobile payment systems like this could be a huge boon for the small retailer, especially the independent bookseller. They allow a store to operate with slightly lower overhead and open the door to more sellers accepting credit cards as payment.  Anything that makes it easier for someone to spend money at your store, or booth, is a boon.

I’m curious, of those who are reading, how do you accept payments?  Have you used Square or PayPal’s mobile credit card reader, or another one that I haven’t mentioned here?