Archive for December, 2011

YPU How To: Avoid Costly Credit Card Terminals

December 20, 2011

There is no denying that digital transactions are becoming the “go-to” payment option for consumers. Less people carry cash on them and businesses these days are all but forced to accept credit or debit cards in fear of missing out on potential customers. While more convenient for the customer, traditional credit card machines come with a fair share of costly overhead, which usually includes rental fees, transaction fees, lengthy contracts and even the cost for the paper rolls that generate the receipt.

For most businesses, these “machine fees” are generally covered by the sheer amount of business they can accept just by having the machine as a payment option. The monthly rental fees get lost in the mix of profit and are seen as just another required expense. But what about businesses that are seasonal, or ones that don’t make daily transactions? For these types of businesses, traditional credit card machines can quickly become a leech, sucking precious capital each month, especially when the machine is not being used.

Independent businesses in this scenario are left with a tough decision. Getting rid of the machine would save overhead, but would also severely limit the amount of business that could be done.

Until recently, small or seasonal style businesses were sometimes stuck with lengthy contracts on expensive machines that were used just enough to warrant their necessity; oftentimes just making enough sales with the machine to cover it’s monthly cost.

I’m happy to report that those days are officially over.

Square Credit Card Reader Logo

Enter Square:

Square is on track to revolutionize the way small businesses handle digital transactions. In addition to no contracts, no recurring monthly fees, no monthly minimums and no overhead, Square only makes money when you make money. Using their free card reader (which plugs into your smartphone), Square only charges a modest 2.75% per swipe so you no longer have to cover “machine rental fees” during your down months.

Handy Features:

Size

For starters, Square is one of the most portable card readers in existence. It’s a little bit bigger than a postage stamp, and travels easily in a briefcase, purse, or even your pocket. That means no more lugging around a bulky card machine for remote business transactions.

Power

Most traditional card machines have rechargeable batteries, but battery life can be unpredictable (especially if you forget to charge the machine the night before you need it). This used to force small businesses-on-the-go to setup their operations close to power outlets, and usually away from high foot traffic areas. The beauty of the Square is that it plugs right into your smartphone, so you can literally conduct business anywhere. Whether in the middle of the trade-show floor, or in the parking lot, the Square is ready to collect payment wherever you happen to find a potential client.

Easy Bank Account Linking

Getting money from the Square into your chosen bank account could not be any easier. During your initial setup, Square will ask for your bank account information and deposit a small amount of money into that account (similar to the way PayPal or other digital transaction services verify your information). Once you see that the deposit has occurred, simply login to your Square account and enter the amount that was deposited to verify that you have linked the correct bank account. This ensures that transactions made with the Square go to your account, and your account only.

No Paper

Square is about as simple as it gets when it comes to digital transactions. Using a completely digitized receipt system, Square allows consumers to choose whether they would like a receipt emailed to them, or sent via text to their phone. This eliminates the hassle of keeping up with paper receipt supplies, waiting for the receipt to print, or having to change a receipt roll in the middle of a transaction.

Easy User Interface

With the ability to customize your display logo and create custom messages for each transaction, Square makes it easy for businesses to brand their transactions with customers. Using a slick, and easy to navigate interface, businesses can update their information directly from Square’s free phone app, or from a home computer.

Free Reader

In case you missed it above, the actual reader is absolutely Free! As soon as you sign up with Square, they will mail you a free card reader, which is yours to keep. After spending years paying monthly “equipment rental fees” for old clunky machines, the notion of a free reader is an incredible breath of fresh air.

Cost Effective

Whether is was a bad month for business, or you simply decided to take a vacation, you don’t have to worry about forking over money for a card machine that is not being used. In fact, Square only gets paid when you get paid, and there are no monthly fees for using the service. That means if you decide to join the Peace Corps for 3 months, Square won’t drain money from your business while you are gone for ancillary fees, and will be waiting with open arms when you return.

No Credit Check

Businesses no longer need to undergo a lengthy credit evaluation in order to qualify for machine rentals. With Square, anyone can use the service for their transaction needs. One caveat to this convenience is that Square limits limits large, un-swiped transactions, which could be problematic for merchants who regularly have these types of sales.

No Contracts

One of the best things about Square is that there is no contract (and more importantly, no fees associated with breaking a contract). Many credit card machine providers make the majority of their profit on businesses who can either no longer afford their machine rental, or are going out of business and no longer need the terminal. Terminating a contract with these providers before the agreed upon cancellation date usually comes with hefty cancellation fees. Thankfully, this is not the case with Square.

A Few Drawbacks:

Although we have not had reason to contact Square’s customer service department, it has been noted in other reviews that Support is in dire need of a revamp. Square-to-merchant correspondence seems to be done mostly via email, and any attempt to contact by phone leads to a voicemail prompt. Square was recently valued at over $1 billion so one would think there will be a dedicated, customer support team in the near future.

Another feature that causes some headaches for merchants is Square’s rolling seven day limit for typed-in transactions (non-swiped) that exceed $1,000. For businesses that regularly make large transactions, this limit can be frustrating. All other single transactions under $1,000 are usually applied to the merchants bank account within 24 hours.

Is Square Right For You?

Square is easily one of the most flexible payment options available to merchants today. They have essentially “bucked” the traditional card terminal system and made portable, digital transactions a tangible reality for any business.

What do you think? Does Square seem like the right fit for your business?

Feel free to comment below on your experiences with Square and how it has helped, or not helped your business.

For more information, please check out Square’s website.

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