Credit Card Processing: Mobile vs. Traditional

Posted by on November 2, 2012 in POS Systems [ 0 Comments ]

credit card processingAs the world of business evolves, so do the traditional ways of doing things. Credit card processing, for example, has been growing in the online world, and is now finding a place within the mobile industry. With the rise of smartphones, mobile credit card processing processing has gained popularity as a new way to make more sales and connect with even more customers.

Regardless of the hype, retailers want to know: which is better for my business? Though some see mobile processing as innovative and convenient, others find comfort in the options a traditional processing plan allows for.

So, from monthly fees to customer convenience, you’ll want to consider each and every aspect to determine what is going to work best for you, your customers and your budget.

The Equipment

Credit card processing requires a card reader – whether it’s plugged into your phone or sitting next to a cash register; and the equipment is often the cheapest part of getting started with credit card processing. However, cost efficient or not, both the traditional and mobile methods require equipment. So, from card readers to phones, you’ll want to compare the costs of equipment you’ll need to properly service your customers.

  • Mobile: To ensure customer safety, you’ll need to invest in a separate phone, using one for business and one for personal. All data is stored within the app that you download, and if lost, can be detrimental to your business and customers alike. Consider how many employees will then need a separate phone to get an accurate cost idea.
  • Traditional: card reader. The reader itself is often free, but you’ll still need to invest in a POS system for your store. From there, you’ll need to get software and various other pieces of equipment to be prepared for payments.

Fee Structure

Businesses everywhere are fighting credit card fees. From monthly payments to swipe percentages, both options can be an expensive monthly payment. reports that, “According to Stella Fayman, Marketing Ninja at FeeFighters, a lot of card processors make their money off small businesses who don’t read the fine print.” While these fees and fine prints will vary from one company to another, start by comparing the two most popular merchants in mobile and traditional: Square and Flagship Merchant Services.

  • Mobile: While not all mobile processing merchants can say the same, front-runner, Square, charges one swiping fee of 2.75%. The rest, including software cost, monthly fees and setup fees are non-existent. Depending on your purchasing volume, this could be the most cost effective method.
  • Traditional: Flagship Merchant Services, regarded one of the most business friendly traditional processing options offers month to month contracts, no startup costs and swipe fees range from .19% to .38%.

Customer Convenience

No matter what works for your business, the most important aspect of choosing the right card processor is your customer. Studies find that a customer paying with credit spends nearly 20% more than their cash counterpart; therefore it’s in your best interest to choose the method that will be the most convenient for them. Though mobile seems like the most flexible option, not every customer wants to make a payment on a smartphone.

  • Mobile: While mobile allows you to sell anywhere and everywhere, it’s important that you take security into account. For customers, a mobile terminal may not be as appealing as a traditional one. With 276 hacking incidents this year alone, consumers are concerned.
  • Traditional: Choosing a traditional merchant may not put you behind the pack for customer convenience. Many are now offering web based software options, as well as virtual terminals and payment gateways. This allows you appeal to all your customers, not just the mobile savvy ones.

Credit card processing is one of the most important aspects of your business, so it’s imperative that you get it right. However, with so many options on the market it may be hard to choose the one that is right for your business.

Though the mobile credit processing technology is new, its benefits have been made clear by professionals in all industries. However, traditional methods may allow greater flexibility for those who run a storefront, as well as an online payment gateway and on the go payments. Consider what is best for your wallet, your customers and your bottom line to make the best decision.

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