Taking Credit Card Payments on the Go for Less

Square, the credit card processor for your phone, is cool, but there's a much less expensive alternative.

I'm a pretty big fan of Square, the credit card processing service that allows you to turn your iPhone, iPad, or Android phone into a credit card machine. With this service, you plug a device into the audio jack of your phone and start swiping cards. I've seen lawyers using it in the office along with other vendors like coffee shops and ice cream stores. The reason people like Square is that you're up and running in minutes, and you don't have to deal with the hassle of opening a merchant account with your bank or other provider.

Square charges a fee of 2.75% of each swiped transaction. It charges 3.5% for transactions when the card isn't available to be swiped. Square is growing like a weed and has added more than 500,000 accounts in the past year.

Square works really well and it has a great interface. Your clients can sign on the phone, and you can e-mail a receipt. Users love it.

The problem with Square is the fee.

A less expensive alternative is GoPayment from Intuit. Intuit is, of course, the company behind Quicken, QuickBooks, and TurboTax. It has a service that is very similar to Square and involves a device that plugs into the phone's audio jack. In addition to iPhone, iPad, and Android, this device also works on the Blackberry.

GoPayment charges 2.7% for swiped transactions and 3.7% on keyed transactions. Basically, it's charging about the same as Square.

However, GoPayment offers a high-volume option that requires payment of a $12.95 per-month fee. Once you sign up for that plan, you'll get a rate of 1.7% on swiped transactions and 2.7% on manually entered charges. That savings can really add up.

Let's say you're charging $25,000 per month on cards. That's $300,000 per year. Using GoPayment instead of Square will save you $3,150 for the year. That's not chump change.

GoPayment even gives regular bank merchant accounts a run for their money on rates. Plus, you can't beat the convenience of being able to use the device on the go.

If you're interested in taking cards, I'd check out GoPayment. If you find more and more clients paying with cards, then talk with your bank and other providers and see whether they can offer a better rate. You may, however, find that the convenience and rates offered by GoPayment make it a keeper.

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