
One question that I am asked is if our unit should
accept credit cards. The answer is an emphatic yes! There are three main reasons a Unit should take credit cards.
- Ease of use - More people use credit/debit cards than use cash/checks for transactions
- Safety – Using credit cards reduces the amount of cash on hand and the potential of theft
- Sales increase – In units I have observed accepting credit card payments, there is at least a 14% increase in overall sales
The real question is which system you should use. Smartphones have created a new industry called mobile Point-Of-Sale or mPOS for short. These devices have reduced the cost of credit card transactions, allow several different options for taking a credit card payment, and have become more acceptable the last several years.
There are a few items that I look for when choosing an mPOS service. First, I want the best rate possible, but I also want to be able to predict my processing fees. Because I do not use this device year-round, I do not want to pay a monthly fee. I also want an mPOS device that is easy enough a Cub Scout could use it and it can be used by multiple people. Finally, I do not want to pay for any hardware or terminal.
With these criteria in mind, this is a review of the four most popular credit card readers for smartphones.
There are a few common traits between all of these services. They all have a free app that is downloaded to your iPhone or Android phone and all of them have some form of iPad use. However, some have more integration than others. These mPOS services also offer a free device once your service is approved. In most of these systems, a person can sign up as an individual or a merchant. Even if you sign up for an individual account, all systems will do a “soft hit” to your credit report. It is more to verify you are who you say you are and does not affect your credit score. To sign up as a merchant, the Unit must have a Tax ID number which can be obtained through your Charter Organization or in some cases through your local Council. There can be an advantage of registering as a merchant depending on the service used which we will discuss later. Fees below are for standard swiping of a card. Keying in a credit/debit card number will increase this fee. Finally, all readers below are PCI compliant for security.
Below is a summary of the difference in mPOS readers.
|
Rate
|
iPad Integration
|
Accept Checks
|
Debit Card Access to Account
|
Multiple Account Users
|
Phone Support
|
Access to funds
|
| Square |
2.75%
|
X
|
|
|
X*
|
|
24 hours
|
| PayAnywhere |
2.69%
|
X*
|
|
|
X
|
X
|
30 min.
|
| PayPal Here |
2.70%
|
|
X
|
X
|
X
|
X
|
30 min.
|
| Intuit GoPayment |
2.75%*
|
|
|
|
X
|
|
24 hours
|
I have used all of these readers and here are some insights.
Square –
www.squareup.com
The new readers (issued in the last year) are very reliable.
Advantage
First, iPad integration is easy and free with Square Register for iPad. You can enter in picture of your product and price of product in your Council. Then all a person has to do is touch on the product and the amount comes up. It is easy for a Cub Scout to do. The second advantage is you can have individual log in and password for each reader issued. It allows you to track which Scout sold what item based on the log in. You can also restrict access to the balance in the account and the ability to do returns. All funds go into one account. They have videos that show how to do most items on your phone.
Disadvantage
It can take up to 24 hours for the funds to post to your checking account especially on a Sunday. This can take a couple of days for the first deposit to go through. They currently only offer online support which is good. However, we all would rather talk to a person when we have a problem. The final disadvantage is the reader. While the processing is good, the other readers have a tab so that the reader does not swivel. Square can tend to swivel.
PayAnywhere –
www.payanywhere.com
While the newcomer on the block, PayAnywhere has quickly become attractive for Units.
Advantage
PayAnywhere has the lowest rates. However, remember the difference of the cost on a $10 item is 1 cent, so do not have that be the deciding factor. PayAnywhere has both phone and live chat support. Reports are easy to read especially on the mobile device. They have videos that show how to do most items on your phone.
Disadvantage
A unit can set up multiple readers with the same account but you cannot sort who sold what unless something is typed into the description. In addition, everyone has full access to the account. While there is integration for iPad, it takes technical support to set it up. The length of time to receive funds is more immediate. Final, if you are set up as an individual account instead of a merchant account, one can only take charges of up to $500 in one day.
PayPal Here –
www.paypal.com/here
PayPal has some brand recognition and is an extension of a Unit PayPal account.
Advantage
The biggest advantage is that PayPal Here is an extension of your PayPal account. Because of this, Units can also take check images as well as credit/debit cards. In addition, the Unit can get a Debit Card for the PayPal account to use the funds immediately. They also have phone support and have quick access to funds.
Disadvantage
The biggest disadvantage is that PayPal Here is an extension of your PayPal account. It takes extra effort to have the funds transferred to a Unit checking account. There is an additional fee to set up items for display on an iPad. Similar to PayAnywhere, a unit can set up multiple readers with the same account but you cannot sort who sold what unless something is typed into the description. In addition, everyone has full access to the account.
Intuit GoPayment –
www.intuit-gopayment.com
Intuit is the system used by the Girl Scouts
Advantage
The biggest advantage is all payments can be downloaded to Quickbooks, but is only an advantage if you use Quickbooks. They do have a reduced processing fee for just $12.95/month. However, this only pays for itself if you have over $1275 in card transactions in that month.
Disadvantage
The biggest disadvantage is Units must set up a Merchant Account. You may be able to maneuver around this if your Council is willing to set this up for you like the Girl Scouts do. They also have no phone support. Finally, payment can take as long as 24 hours to deposit.
Surcharges
A Surcharge is when you pass on the processing fee to the customer. There are currently 10 states with laws that prohibit surcharges of any type. The following states do not allow a surcharge by law: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Additional states are considering similar such laws, so you should continue to monitor this issue if you plan to charge a surcharge.
If you decide to apply a surcharge it is your responsibility to meet all legal and card network requirements which include the following:
- Surcharges may only be applied to credit card transactions, not debit cards or pre-paid cards.
- You can only charge your customer as much as you are charged for processing the credit card transaction.
- The surcharge has to be disclosed to the customer before the transaction via prominent signage.
- The surcharge must be listed separately on the transaction receipt. An option is to use the tax feature on most apps for the fee.
- The surcharge must be applied universally to credit cards from all payment Networks (Visa, MasterCard, American Express, and Discover).
If you intend to enact a surcharge policy, you must first provide notice directly to both Visa and MasterCard.