Mobile payments on the move

Jason Glunt, owner of Salud Beer Shop in Charlotte, N.C., uses Square on his iPad at his store. The credit-card processing system is free to get and requires lower fees than other processing systems. Glunt says he can spend that money instead on product (beer).
Jason Glunt, owner of Salud Beer Shop in Charlotte, N.C., uses Square on his iPad at his store. The credit-card processing system is free to get and requires lower fees than other processing systems. Glunt says he can spend that money instead on product (beer). Todd Sumlin/Charlotte Observer

The way we pay for things is changing. Those credit-card keypads yielding paper receipts are giving way to a new group of mobile payment devices that merchants say charge cheaper swipe fees, and are faster and easier to use.

Recently, Starbucks signed on with Square, one of the more popular devices in the market. That means 7,000 Starbucks stores will process U.S. credit and debit card transactions with Square, thus linking the card reader with a major retailer.

An array of other devices are on the market, including Intuit GoPayment and PayPal Here. Others in the mobile payment mix include Groupon and Google. Several large retailers, including WalMart, Best Buy, Target and others, recently announced they're joining forces on their own upcoming mobile payment method.

Here's how these systems generally work: Commerce companies provide a free card reader to retailers, who plug it into the headphone jack of their mobile phone.

After customers get their card swiped, they sign receipts with their finger, and have the option to leave tips. Receipts are sent by text or email. Merchants are charged a percentage per swipe, with the remaining money from the purchase deposited into their account.

Square's iPad version, called Square Register, allows sellers to keep inventory of sales.

"I can also track what are my top sellers," said Emma Merisier, who uses the iPad version on her Charlotte food truck, SouthernCakeQueen. "That can help me decide what cupcakes I'm baking for the following week."

Some brick-and-mortar retailers say they became tired of other point-of-sale credit-card systems that included hefty bank processing fees. Jason Glunt, owner of Salud Beer Shop in Charlotte, said he's saving about $250 a month by using Square. "For me, for what I do, it's perfect," Glunt said. "I'd rather spend my money on product, not on some fancy checkout system."

Mobile payment systems aren't foolproof, though - they're at the mercy of how fast phones and tablets can process the cards. Plus, systems can go down, meaning lost business among customers who no longer carry cash.

Some retailers worry about customers questioning guarantees that credit card information remains private.

And some merchants are surprised when there are delays with their deposits, which can run from one to three days, or longer, they say.

Changing the way we pay

Square

• How it works: Free white square card reader plugs into the headphone jack on an iPhone, iPad or Android phone.

• Cost: 2.75 percent per swipe, or $275 per month.

• Pros: Includes a reward system for regular customers based on the number of purchases. There's also a Pay by Square phone app, which allows customers to pay with their phone.

• Cons: The popular register app, which tracks inventory, is only for iPad; Android tablet users are left out.

Intuit GoPayment

• How it works: Free black elongated card reader plugs into the headphone jack on an iPhone, iPad or Android phones and tablets.

• Cost: 2.7 percent per swipe; that amount goes up or down depending on whether merchant pays an additional monthly fee, or keys in the credit card transaction.

• Pros: Some users say Intuit's device cradles the phone better than Square, which can swivel in the jack. Links with Intuit QuickBooks for convenient bookkeeping.

• Cons: Although launched in 2009, the same year Square was founded, Intuit GoPayment is silent on its number of users.

PayPal Here

• How it works: Free blue triangular card reader plugs into the headphone jack.

• Cost: 2.7 percent per swipe.

• Pros: Takes PayPal and checks, in addition to credit and debit cards. Some say triangular shape sits on the phone better than Square.

• Cons: Not supported on Android tablets. Launched earlier this year, it's one of the newest on the market.

SOURCES: gopayment.com, squareup.com, paypal.com/here

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