Credit Cards Go Mobile: Pros and Cons of 5 Mobile Payment Processors

Small businesses these days are expected to be able to process credit cards. For years, though, it was a tough problem and required opening merchant accounts, handling contracts, and setting up hardware which cut into a business’s bottom line.

Now mobile credit card processors have arisen to help fix this problem. Business owners can now set up an app, attach a card reader to their smartphones, and they’re all set. Even businesses that traditionally have not accepted credit cards–like a farmer’s market–can now accept plastic, making transactions easier for everyone.

But is there a mobile payment processor that is better suited for a small business? Here are five popular mobile payment processors and some of the catches in their terms and conditions.

1. Square

Square is the big one. As one of the biggest and oldest mobile payment processors, many businesses default to Square. The company provides a free card processor when you set up an account, and it is also very easy to set up access to.

Square charges 2.75% per swipe, a higher rate than the other processors listed; however, the 2.75% is a flat rate and there are no additional charges for minimum or maximum sales. This makes it much easier for an owner to calculate just how much is going directly to Square.

Square’s biggest problem continues to be its poor customer and tech support, as talking to a real person over the phone is all but impossible. In addition, Square is more prone to freezing accounts due to security concerns. While Square may be the biggest payment processor, it’s better suited for tech-savvy individuals.

2. PayPal Here

PayPal Here is another part of PayPal’s service for payment processing. It can connect with a business owner’s PayPal account to give access to online storefronts to those accounts. PayPal Here charges 2.70% per swipe, and cashes checks for free as well as records cash transactions.

PayPal Here is a little clunky and old, but its ability to process a wide variety of payments makes it a solid choice.

3. PayAnywhere

PayAnywhere (from North American Bancard) is the best choice for a business more limited in its POS options and that needs a register and nothing else.

PayAnywhere offers a two-tiered solution for businesses. The “Storefront” edition, intended for businesses that sell more than $5,000 per month of goods, charges $12.95 a month and 1.69% per swipe–the lowest potential percentage of the five processors listed. (If a business fails to sell $5,000 a month, then the $12.95 fee leaps up to $79.)  The Mobile edition, intended for on-the-go businesses and businesses with smaller transactions, charges a flat 2.69%.

The 1.69% rate does not apply to transactions from commercial cards or rewards cards (transactions from those cards are charged 2.69%), which is why PayAnywhere is not suitable for B2B transactions.

4. Amazon Register

Amazon Register is the newest of the five, formed in September 2014. This mobile payment processor promises to “put the power of Amazon behind your business.”

One way that it does so is by offering lower rates than Square or PayPal Here. Amazon charges just 2.50% per swipe, without any minimum sale requirements or tiered options. It also offers an option to automatically calculate taxes and tips into a business’’s prices.

Amazon requires its users to have an Amazon Register account to conduct business using its service. This is not a bad thing, as an Amazon Register account grants access to deals and services for other Amazon products such as tablets, receipt printers, and cash drawers.

5. QuickBooks GoPayment

QuickBooks GoPayment is different from the other four; it is designed to be integrated with QuickBooks software. This means that a business owner who does not use QuickBooks may want to look somewhere else.

Just like PayAnywhere, QuickBooks offers two different plans at a low cost. For $19.95 a month, a business pays 1.75% per swipe, but must sell at least $3,000 a month worth of goods to make the monthly fee worthwhile; with the “pay-as-you-go” option the $19.95 fee is waived, and a business pays 2.40% per swipe, which is still lower than other processors. Both options also charge an additional $0.25 per transaction fee.

So, which payment processor should you choose? Square is suited for business owners who are tech savvy and don’t want to deal with complicated payment schemes. PayPal is useful for businesses where customers often do not pay with plastic. PayAnywhere is for small but successful businesses that sell to ordinary people. Amazon Register is for those who want a cheap, simple payment processor, and Quickbooks GoPayment is good for those who are willing accept a more complicated system to get better deals.

It is up to you to decide which mobile payment processor to use, but none of these are outright bad choices. With all of these options, accepting credit cards will now truly require nothing more than a swipe.

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