Archive for May 4th, 2012

Accept Credit Cards from your Friends on your Smartphone

We’ve all been there; you’re at dinner with friends, and the bill comes. No one has cash. After having split appetizers, meals and desserts, for the last two hours, confusion ensues. Can the waiter split that appetizer five ways? Can he split that dessert a different three ways?

Wouldn’t it be amazing if you could just pay the bill in full, and then have your friends pay YOU back, right at the table, with their credit cards? Fortunately, now it’s possible. Thanks to mobile payment processing services like GoPayment and Square, you can now accept credit card payments from your friends on the spot using your smartphone. You just swipe their card using a small device that hooks up to your phone’s headphone jack, and you’ll see it appear in your bank account in just a day or two.

These card processors are free to set up and fairly inexpensive to manage. You simply pay a percentage per transaction each time you use it. The two most popular mobile card-processing options are GoPayment and Square. GoPayment is a product of Intuit, manufacturer of Quicken accounting software. With GoPayment, you sign up for an account online and are mailed a small device called a dongle. The dongle is plugged into the headphone jack of your iPhone or Android-based phone, and this is where you will swipe your friends’ cards when receiving a payment.

In order to start receiving payments, however, you must download and install the GoPayment application on your phone. This will allow you to enter transaction amounts and key in card numbers, if need be.

When you swipe a card with GoPayment’s technology, the card information is sent wirelessly for processing and is charged the amount you type into the app. Typically, you’ll see the transaction deposited directly into your bank account within 24 hours.

GoPayment offers two payment options: one with a monthly fee, and one without. The monthly fee option offers lower per-transaction charges, but is probably not the most cost-effective choice for the casual card processor. If you plan to use the technology on a regular basis, then the monthly plan may be a good option for you.

Square, GoPayment’s primary competitor, is very similar. Like GoPayment, Square provides you with a free dongle with which to swipe cards. It works alongside an app, and when you swipe a card, the transaction is processed and deposited into your bank account. Square does not offer a monthly plan. Until recently, Square was only open to users who charged $1,000 or less a month. Now, there is no minimum requirement, and anyone is able to utilize their services.

Square was created in 2009 by Twitter co-founder Jack Dorsey. Interestingly enough, Square has seen a surge in popularity over the past few years, much like Twitter. Its technology is currently available in Wal-mart stores and more than 200 Apple stores across the nation.

The popularity of both these technologies is rising, however. With the ease at which you can set up mobile payments using these two services, not to mention the low costs to set up and manage them, small businesses and individuals all over the country are jumping on board.

Eric Stauffer provides payment service reviews for companies like Eliot Management Group and National Processing Company. He also helps with merchant account agreement negotiations.

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