Credit card processing can be difficult and expensive for massage therapists and other small merchants. There is typically a tortuous merchant-account approval process, hefty set-up fees, and high ongoing fees to accept credit card payments from your customers.
Now, if you own (or are willing to get) an iPhone, iPad, iPod Touch, or Android phone, there is a nifty-looking new service that can make your life easier – and save you quite a few bucks.
It’s an amazingly simple system. You download the app, create and confirm your account, provide your bank account information, and you’re ready to go. Within a half-hour of learning about the product, I had processed several sample transactions (I have only done keyed-in transactions to this point; the square card-swipe gizmo that gives the product its name won’t arrive in the mail for another few weeks).
Square lets your customers add a tip to their payment (you can set it to base the tip either on a percentage of the bill or on a fixed dollar amount). The customer signs with a swipe of their finger. You can optionally send a receipt to their e-mail address.
Here’s how Square compares with PayPal’s Virtual Terminal (what I currently use to process credit card payments for massage treatments and my couples massage classes) and with typical credit card processing set-ups (using mid-range estimates for traditional merchant account processing):
|Square||PayPal VT||Typical CC|
|Merchant account required||No||No||Yes|
|Contract required||No||No||1-2 years|
|Mobile card reader||Free||N/A||$150-$900|
|Card-present (swiped) rate||2.75% + 15¢||N/A||2.9% + 30¢|
|Card-not-present (keyed-in) rate||3.5% + 15¢||3.1% + 30¢||2.9% + 30¢|
|Annual cost (25 $75 transactions/mo.)||$663.75||$1,147.50||$1,482.50|
I’m enthusiastic about the potential of this system. It is a new and relatively untested, but so far in my tests it works really well. The company is well funded and lead by one of the guys who founded Twitter. I will likely move all of my credit card processing over to Square in the not-too-distant future.
If you have experience with Square or other credit card processing systems, please feel free to share your thoughts by adding a comment below.