Mobile commerce and accepting debit and credit cards on iPads and iPhones

Mobile Commerce

Alastair Dodwell August 31st 2012 – Updated Dec 2012.

For many mobile traders or companies offering services from a non-fixed location, accepting and processing credit cards has never been easy or cost-effective. New technology accompanied by new business models are rapidly challenging this paradigm.

With the growth in mobile communications and the advances in mobile computing power and affordability and especially the Apple iPad the options are changing and changing rapidly.

It used to be that you either had a mobile terminal providing credit card processing on the go or you had to record a client’s credit card details and call your office for someone else to enter the details into your office or mail order processing system.

The first option requires you to purchase or lease a mobile terminal for usually £30 – 40 per month and then pay a minimum monthly transaction fee often of another £10 per month. For business with consistent mobile requirements these charges may be acceptable.  For others the pain and hassle of having to call the back office to process a card is less than ideal, especially if your client if waiting to finish the transaction.

A client requested that we find a cost-effective solution enabling them process credit cards in their fly fishing business where they make extensive use of Apple iPads for customer information management.

New Mobile Credit Card Processing Solutions

At the time of writing we have been testing two three iPad compatible credit card processing systems. Update – Dec 2012. Another player has just joined the market. SumUp.

The first is from a Swedish company called iZettle that recently entered the UK market with a limited trial program. While the second, mPowa, is a British company with a background in e-commerce systems.

Both these solutions provide you with a card reader that plugs into mobile devices and support Apple iPhone and iPad as well as a number of Android devices with a promise of Windows Mobile to follow. You then merely swipe a credit card through the reader and the iPad contacts the central server to validate the transaction. Upon validation customers sign the screen and receive a receipt via email. Both solutions provide simple tools to manage the account, record sales and transactions. The iZettle software allows comprehensive development of shopping carts on the iPad.

Charges and costs

Again at the time of writing the charges are similar. Both solutions provide their software and readers for free and charge a fee and commission on any card processed. These are around 2.95% plus a small per transaction fee. There are no monthly services charges and no minimum commitments. This is very refreshing compared to the alternatives that usually require a minimum 12 month contract with minimum monthly fees.

The credit cards processing industry is a huge industry dominated by major banks and niche processing firms who between them process billions of pounds, dollars and other currencies per year and collect a small percentage of the total spend equating of many millions of dollars. .

In the US a firm called Square has established itself as the leader in mobile payments and is already processing hundreds of millions of dollars per month and taking a small percentage charge. This rapid adoption of new technology is shaking the industry. Existing players are being forced to, we expect EBay, Intuit and other to launch similar services over the next year. – Dec 2012 – SumUp are the next player to enter the UK.

Of course there are other aspects to consider in mobile payments such as security, fraud detection reliability and charge backs.

For any small business and especially a business with a desire to take mobile payments these solutions are highly attractive.

The author has extensive background in mobile computing having worked in London and Silicon Valley for Psion and Symbian. Alastair now runs Taybridge Consulting advising clients on mobile applications and has developed and deployed numerous mobile solutions.

Update Dec 2012: SumUp now offers the same service as the others and seems to work very well in our testing. They offer a flat 2.75% transaction rate and unlike iZettle and mPowa have no additional fees. The reader is free and the app is a free download from the Apple App Store.