How often does your company render services; send an invoice to the client; and wait days, weeks or months to receive payment for the job? Or worse – how often do those invoices go from outstanding to unpaid? For many small businesses, past-due payments are a serious problem when managing cash flow.
Fortunately, with new mobile payment technology, invoices can be a thing of the past and service calls can be turned into immediate capital.
Mobile payment systems give businesses the power to accept customer payments of all forms via a smart phone at the time of service, which eliminates the need to bill clients later. Here are the top three mobile payment systems utilized by small businesses today.
Square is perhaps the most well-known mobile payment option among small businesses. Once you sign up, Square will send you a pocket-sized credit card reader that plugs into your compatible smart phone or tablet. Then simply download the free app and start swiping.
There are no monthly fees associated with the service, but Square does charge a fee for each transaction starting at 2.75 percent. The fee increases to 3.5 percent, with an additional 15 cent fee, on credit cards that are entered manually. Users can expect funds to be deposited within a day or two.
In 2012, online money transfer giant PayPal expanded its offerings to include mobile payments with PayPal Here. The service uses a thumb-sized card reader that plugs into a compatible mobile device and a free app to process credit and debit cards. Additionally, PayPal Here can send electronic invoices, record cash payments, receive funds from PayPal users and accept checks by simply snapping a picture.
Unlike similar mobile payment services, PayPal Here gives users the ability to access their money immediately via a PayPal Business debit card. For those who opt to send money to a bank account outside of PayPal, transfers can take up to a week to process. While the mobile card reader and start-up won’t set you back, PayPal Here charges 2.7 percent on each swiped transaction and 3.5 percent and a 15 cent fee on manual transactions.
Financial software pioneer Intuit offers GoPayment, which also uses a web-enabled device, free app and a mobile card reader to make transactions.
The pricing structure for GoPayment is more complicated than its competitors. There are two options: monthly and pay-as-you-go. The monthly rate is $12.95 per month plus 1.75 percent on swiped cards and 2.75 percent on cards entered in manually. Pay-as-you-go charges 2.75 percent on each swiped transaction and 3.75 percent on manually entered transactions. However, on both pricing options, transactions made with non-qualified cards – corporate or reward credit cards – will accrue charges of 3.75 percent and an additional 15 cent fee. Since 60 percent of consumers have a reward credit card, the expensive non-qualified rates may end up costing more in the long run.
With nearly 20 percent of global transactions being made via mobile payments, it’s clear that this technology is here to stay. No matter which company you select as your mobile payment service provider, we can all agree that it’s time to ditch the invoice.