Saturday, November 17, 2012

The Business Chat - New! Credit card processing

One of the great things about doing my series of large Christmas craft shows is meeting up with so many of my crafty friends from all over the country. I love my studio, I love my work, however sometimes it gets a little lonely in there all by myself. Gathering with groups of other crafters and chatting about our lives is so nice. It`s also a chance to share information and compare notes.

This year the big buzz within the crafty world is the huge selection of new smartphone credit card payment systems that have recently hit the market. I`ve been reading about all the options, now I have talked to people using all the systems and can make some educated decisions.

Here`s the scoop on the new smartphone credit card readers.

In the past those who wanted to accept credit cards as payment needed to sign up for a merchant credit card account. You needed a business bank account (which cost a monthly fee), you paid a set up fee, and then you paid a monthly rental fee along with a percentage of the transaction. You had a special terminal that you could process both credit cards and debit cards with. This was considered necessary for doing business as a full-time crafter, but difficult and too expensive for part time businesses.

Enter the smart phone credit card readers. A smartphone reader plugs into the audio jack of a smartphone or iPad and using either wifi or the 3G network, you can swipe a customers credit card and the money is deposited into your bank account. No monthly rental of expensive equipment. Smartphone card readers do not accept debit cards as they read the stripe on the card not on the chip. Debit cards do not have a stripe.

These have been available in the USA for several years and I`ve been reading all the reports from people using them. It seemed like they were a great option however they were not available in Canada. Well things have changed recently and very quickly.

A year ago I was contacted by the representative of one of the first systems in Canada. As I am a fan of technology, and as I was having a nasty relationship with my expensive credit card system I was happy to jump aboard the smartphone readers. I am currently using Payfirma. This is not an affiliate relationship, I am not making any money plugging their product, I am telling you this so that you know  someone who is using the product and is happy with it. I plug the credit card reader into my iPhone and swipe customer credit cards. In the 12 shows that I have done using this system I have had no problems. Connections have always been fine using the 3G network, customers think it`s super cool to use and the money has always been deposited on time.

In the past month 2 other systems have entered the marketplace and both should be considered. PAYD is a system by Moneris, the large company that is the standard credit card system that everyone uses. I think they saw the writing on the wall and realized that not everyone is willing to pay $100/month and they developed their version of this product. To date I do not know of anyone using this system so I can`t tell you much about it.

Square is an American company that has been available in the USA for several years. It always received rave reviews. They recently opened in Canada and they are actively pushing for mass acceptance. As soon as I`m done with writing this I am signing up for a Square account as they gave me a free reader and it is completely free to use. My neighbour at my last show (5 day BUSY show) was using the Square and I was mighty impressed. It is completely 100% free to set up and use. And it`s easy to use.

These new readers are a brilliant option for anyone who is selling. Anyone. Imagine if you were selling a couch on Craigslist and were able to take a credit card as payment!

Everyone reading this who has a smartphone or an iPad should do some reading and then sign up for an account. As I mentioned, this is not an affiliate post. I am not endorsing any of these products for money. If you have any problems with them don`t call me. I am telling you that I have been using these for almost a year. I know of many people currently using them without problems. If I were a beginner crafter, or a small business who sells occasionally, I would sign up with Square as that is the cheapest option. (as in completely free).

Of course before signing up for anything you should do your own research. Here`s a list of questions to ask.

What to look at when looking for a credit card processing system.
  • How much is the set up charge
  • How much is the monthly fee
  • Is there a long term commitment and if so what is the fee to cancel the contract
  • How much is the reader
  • What is the percentage you pay and is there a transaction fee as well
  • Do they charge different rates for different cards? 
  • One of the biggest scams lately was the extra charge if a customers card was one of the cards that collects some sort of points.
  • What phones is the reader compatible with

And the 3 systems that I mentioned can be found here.


Cheryl Roe said...

In the US square takes both Debit and Credit. So I am not sure about the Canadian cards though. We love our square. We had a different system before and it was horrible expensive.

Linda Campbell said...

Sailor Girl: Thanks !!! I have been waiting *sigh* forever for this and did not know that it was in Canada yet. Thanks so much.

Linda Campbell said...

Sailor Girl: Thanks !!! I have been waiting *sigh* forever for this and did not know that it was in Canada yet. Thanks so much.

Annie said...

Just used Square at today's show. Going to stick with it this holiday season and re-evaluate for 2013. Pros: free card reader, no monthly fees, same %age per swipe no matter which card (though that is higher than others...). Cons: CUSTOMER SERVICE! Ask me how I know... Ordered my reader on September 26 and received it this past Wednesday (Nov 15). The customer service was DISMAL and got me wondering if I wanted to give them my hard-earned money...
En tous cas - glad I had the reader today as I made 3 sales that wouldn't have happened had I not been able to take credit cards...
Very timely post - thanks so much!!

Unknown said...

Thanks so much for the info. Now I just have to find out if I can use it at a show in the US.

Unknown said...

Now I just have to find out if I can use it at a show in the U.S.

Anonymous said...

Square is not 100% free... there is a fee of 2.75% per transaction... works out to very little though.

A representative from Square replied to my question about Interac... they are currently working on adding debit cards to the Canadian Square lineup.

The only problem I had with my Square so far... delivery was delayed by Hurricane Sandy. I'm not going to hold them accountable for that! ;)