Everyone, it seems, is using a mobile payment processing app to split the dinner bill, send money to kids at college or to cover the costs of shared vacations. From Venmo to Cash to Zelle, the options abound. Using these apps may seamlessly solve your cashless problems among friends and families, but a different set of rules applies when you’re accepting payments for your business. In fact, big players like Visa, Mastercard, and Bank of America are jumping into the game with their own versions of payment apps. In recent news, Visa bought Plaid, a fintech startup that connects payment apps like Venmo and Square Cash to users’ bank accounts to transfer funds, for $5.3 billion – a deal that doubled Plaid’s own private valuation.
Everything You Need To Know About Mobile Payment Processing For Your Business
ABOUT – Get to know how mobile payment processing works. Nearly all mobile payment apps work the same. Using a smartphone app and some sort of API framework, they allow small businesses to accept payment seamlessly and on the fly. If the payment is being charged to a credit card, they may use a card reader that is connected to the phone, but that’s not always the case. The payment can also be sent from one bank account to another without the use of a credit card.
BE IN THE KNOW – Get familiar with the top apps for payment processing. There are many apps popping up seemingly every day, but here are a few you’ve probably heard of along with their pros and cons.
- QuickBooks Merchant Services – One of the most seamless options for payment processing is QuickBooks Merchant Services which offers many features that fit business objectives and syncs with Quickbooks. The value of using this tool abounds, saving time, money and improving efficiencies.
- Paypal – The Paypal app is free, but card readers cost $24.99. PayPal works as popularly used as a point of sale system that creates product lists, assigns employee roles, and even tracks sales. The charge for swiped transactions is 2.7% and 3.5% plus 15 cents for keyed-in transactions. Funds received through PayPal payments are available immediately in your PayPal account, which can then be transferred into a bank account at no charge. PayPal is unique in that it can auto-fill customer information when a card is swiped, which can be a huge time-saver.
- Venmo – Venmo, which is owned by Paypal, allows individuals to send money to each other through a free mobile app. Users connect their bank to the app and can send or receive money in a convenient way. After connecting to a bank, users can send money for free. Venmo also recently announced the Venmo Card, which acts as a debit card and uses the money in a person’s account as the source of funds.
- Square – Square can be used for almost any type of business. It’s easy to use and works on mobile as well as desktop. It has many other bells and whistles available, including inventory tracking and analytics, at several price points. It offers the app and card readers for free and collects 2.75% of every payment as a fee, which is common in most mobile payment apps.
- Stripe – Stripe accepts credit cards as well as ACH transactions and Bitcoin payments. Stripe charges 2.9% plus 30 cents per transaction but offers volume discounts for companies doing at least $80,000 per month. Stripe is known for good customer service and rapid response to issues when they arise.
- Veem – Veem is a low-cost choice for processing global payments. Veem focuses on speed, security, and cost-effectiveness, and uses an algorithm to process how your payment (i.e. your money) should travel.
- Plooto – Plooto is another cost-effective option that offers many unique features such as allowing users to prefill their accounts so funds are released for quicker payment, sync with QuickBooks, and the ability to schedule payments in advance.
COMPLY – Understand best practices. Now that you’ve reviewed what mobile processing payment apps do and checked out a few of the most popular ones, it’s a good idea to drill down on how they fit into your business operations. Here are some things to keep in mind:
- Not all apps are for businesses. Although some payment processing apps are the perfect way for three couples to pay the person who booked next month’s concert tickets back, it is not a commercial payment processing app. Venmo is a great example of that, Venmo specifically states on its website that it is NOT a commercial application. In fact, it warns that you could expose your business to risk if you don’t follow the company guidelines.
- Security should be top of mind. Your security and that of your customers should be considered when choosing a mobile payment processing tool. If you are storing credit card (and other sensitive data) for your customers, you need to understand what security measures are in place to protect your reputation and your customers’ private information.
- Read the fine print. Some mobile payment platforms have hidden costs that add up and chip away at your profit margins. While it’s convenient, it may not make good business sense to offer everything to everyone. Be sure to do the math; understand what your costs are before getting started.
- Avoid creating silos. Whenever introducing new technology into your business operations, it’s is essential to examine how it fits with other tools you use. Some key questions you can ask are:
- Does it sync up with your inventory tool?
- Are you able to capture the marketing analytics related to the sale?
- Will you have the capability to add the email to your email tool?
- Does it sync up with your billing/accounting software?
If you are considering adding a new platform processing tool to your operations and are not sure which way to turn, Agile Planners can help. We specialize in helping businesses use technology tools to optimize operations. Our full suite of services includes:
- Bookkeeping
- Consulting
- Tech Integration
- Training
