Mobile card reader helps small businesses process credit card payments

Today’s fast-changing digital world presents many challenges for small business owners. Perhaps one of the most significant challenges is the company’s ability to adjust to consumer expectations of paying with plastic.

Square Inc.

Innovation: mobile card reader and application

Traditional credit card readers often come with heavy upfront costs for equipment in addition to monthly fees and transaction fees.

San Francisco-based Square Inc., sought to alleviate some of those cost burdens and has created a new smart-phone/tablet application and a portable card reader that allows any business or consumer to easily accept payments with credit cards.

Milwaukee-based Streetza Pizza food truck and Milwaukee Boat Line cruise ships are two Milwaukee-area businesses taking advantage of the Square application and device.

“Small business owners need to keep expenses to a minimum,” said Lindsay Weise, spokesperson for Square Inc. “But sometimes they can lose a sale if they don’t have the ability to accept credit. That’s what we want to alleviate.”

The Square application is available for free for iPhone, iPad and Android devices, Weise said.

“Once an individual or a company downloads and signs up for a Square account, we will send them a free card reader,” she said.

The card reader plugs into the headphone jack on the device. Once the application is loaded, a company or an individual can begin accepting credit card payments as long as there is a Wi-Fi or 3G signal, Weise said.

Merchants are also able to send a digital receipt to a consumer’s email outlining the details of the transaction.

Users can input personal and bank account information on Square Inc’s secure website, Each time a transaction is made the money is deposited directly into that bank account. A 2.75 percent transaction fee is attributed to every swipe. If the credit card numbers are typed in manually, the transaction fee is 3.5 percent plus an additional 15 cents, Weise said.

“What’s unique about Square is that the card reader hardware is free and the application is free, so the only thing the business gets charged is the 2.75 percent transaction fee, which is still lower than most traditional credit card transaction fees,” Weise said. “Our main goal is to make accepting credit card payments easy for small businesses. When we launched out of beta in 2010, we as a company decided to always offer the reader and the application for free.”

The Square card reader is capable of accepting all types of credit cards, Weise said.

The company was co-founded by small business owner Jim McKelvey and Twitter founder, Jack Dorsey.

“Jim is a glass artist who owns a small business in the St. Louis area,” Weise said. “He, like many small business owners, lost a sale one day because he couldn’t accept credit card payments.”

McKelvey and Dorsey created the Square platform and card reader device specifically for small business owners.

Square recently launched a new component to its iPad application, that allows small business owners to create a product catalogue and store frequent customer information, Weise said.

“Businesses using the application on the iPad can now create a product library so they can quickly ring up customers rather than individually typing in prices,” Weise said.

The Square card-case feature allows consumers to keep a tab at their favorite square merchants.

“Regular visitors now have the option of not even swiping their cards. Merchants can store card information and ring up items on a person’s individual tab if they choose to do so,” she said.

According to Weise, Square has shipped more than 500,000 card readers across the U.S., and plans to take a serious look at the international markets beginning in 2012.

“Square is really something that is a long overdo for small businesses,” Weise said. “Small businesses can now accept all forms of payment quickly and easily. It allows for more consumer interaction and further development of the relationship between customer and business owners.”

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