mobile credit card processing
There are many options these days for mobile processing.
When it comes to ANY credit card processing there is a wholesale rate (Interchange) that Visa and Mastercard set for each type of card and EVERYONE has to pay this rate.
Here is how that wholesale rate factors in when you see advertisements for Square, Paypal Here, or Intuit Mobile and their 2.75% flat charges.
If someone swipes a standard debit card from a major bank the actual interchange rate is
.05% + $0.22
With Square you will pay 2.75%
Depending on the size of your transaction Square is either an incredible deal, or a really bad deal.
On a $5 transaction (typical coffee shop or snack shop)
your fee would be $5*.05%+$0.22 which would be $0.2225 (plus any charges from your processor)
with Square your fee would be $5 * 2.75% which is only $0.1375
In this case Square is your best bet.
Suppose you do a $100 transaction with the same type of debit card
$100 * .05% + $0.22 = $0.27
With Square you would pay
$100 * 2.75% = $2.75
Square is 10x more expensive in this case.
As you can see it depends on your type of business whether you would want to use Square or Paypal mobile and their flat rate processing.
Another factor to consider is that Square charges 3.5% if you key enter the card number instead of swiping.
Most traditional processors offer a mobile solution these days too so depending on your average transaction size and total monthly processing it might be best to go with a traditional merchant account and use their mobile swiper instead of Square or Paypal.
General rule of thumb that we tell our potential customers-
Less than $5,000 in processing - Use Square
Average ticket less than $8 - Use Square
Anyone who does more than this should consider a traditional merchant account.
There are hundreds of different interchange rates but the 3 most common cards are:
Debit Card - .05% + $0.22
Rewards Card- 1.65% + $0.10
Business Card - 2.25% + $0.10
You can plug these numbers into the equation to see whether you should go with Square or a traditional processor.