Square launches NFC mobile card reader with Apple Pay support
Square on Monday officially launched a new mobile card reader compatible with Apple Pay, something that could potentially boost the latter platform's support outside of major retail chains.
The Contactless and Chip Reader supports not just Apple Pay but Android Pay, Samsung Pay, and chip-based credit and debit cards. It works with Square's existing point-of-sale app, and moreover includes the company's previous magstripe card reader for backwards compatibility.
The CCR costs just $49, though each transaction carries a 2.75 percent fee.
Apple and Square first teased the new reader at the former's Worldwide Developer Conference in June, but didn't offer a precise release date at the time.
One of Apple's Pay's biggest obstacles has been small business support. Although Apple has made attempts to push into that market, many independents can't afford NFC-equipped terminals, and indeed many national U.S. chains have yet to finish upgrading.
PayAnywhere recently launched an Apple Pay-ready mobile reader of its own, but Square is one of the most popular payment options for small businesses, particularly among trailer and kiosk owners.
The Contactless and Chip Reader supports not just Apple Pay but Android Pay, Samsung Pay, and chip-based credit and debit cards. It works with Square's existing point-of-sale app, and moreover includes the company's previous magstripe card reader for backwards compatibility.
The CCR costs just $49, though each transaction carries a 2.75 percent fee.
Apple and Square first teased the new reader at the former's Worldwide Developer Conference in June, but didn't offer a precise release date at the time.
One of Apple's Pay's biggest obstacles has been small business support. Although Apple has made attempts to push into that market, many independents can't afford NFC-equipped terminals, and indeed many national U.S. chains have yet to finish upgrading.
PayAnywhere recently launched an Apple Pay-ready mobile reader of its own, but Square is one of the most popular payment options for small businesses, particularly among trailer and kiosk owners.
Comments
This is great. For small businesses that cannot afford a credit department the 2.75% is not all bad. Much more reasonable than having the overhead in house. This enables them to be relevant in the payments game. I would like to see an in between solution for mid sized businesses. We currently pay 1.12% and will not pay the premium for this type of service. Would I pay 0.50% more? Yes.
2.75% ? Ouch...
Double Ouch!
Square is (IMHO) fighting a losing battle. As I see it, merchants are going to get NFC terminals from their Card processor. Many of these will include the tech needed for make Apple Pay and others work OOTB.
I used Apple Pay at my local brewery the other day. They are the sort of SME's that Square are targetting. With many, the boat that Square is after has already sailed.
[edit to add]
Paypal has been advertising a similar device here in the UK in recent months.
This leads me to be more certain that Square will not be a success if they decide to launch on this side of the Atlantic. Paypal is a known brand. Square is most certainly not.
This is great. For small businesses that cannot afford a credit department the 2.75% is not all bad. Much more reasonable than having the overhead in house. This enables them to be relevant in the payments game. I would like to see an in between solution for mid sized businesses. We currently pay 1.12% and will not pay the premium for this type of service. Would I pay 0.50% more? Yes.
How do you get the low rate of 1.12%? I thought most small businesses paid close to 3% processing fees. I see Square charges 2.65% for processing and now 2.75% for contactless. So for their existing customers it's only gone up by 0.1%? Seems fair.
Or is this 2.75% ON TOP of existing fees (which would seem ridiculous)?
EDITED: On another note, they can sell this reader for $49? If their fees are competitive with other processors, how can anyone claim price is the barrier to merchants upgrading to NFC?
How do you get the low rate of 1.12%? I thought most small businesses paid close to 3% processing fees. I see Square charges 2.65% for processing and now 2.75% for contactless. So for their existing customers it's only gone up by 0.1%? Seems fair.
Or is this 2.75% ON TOP of existing fees (which would seem ridiculous)?
EDITED: On another note, they can sell this reader for $49? If their fees are competitive with other processors, how can anyone claim price is the barrier to merchants upgrading to NFC?
My business has revenues around approx. $250M annually so I am sure it is a volume thing? I don't handle the contracts directly so lack full details. This is with my current vendor not square...
My business has revenues around approx. $250M annually so I am sure it is a volume thing? I don't handle the contracts directly so lack full details. This is with my current vendor not square...
That makes sense. And you wouldn't be the type of company that uses Square. Small businesses are their main target. I also see people selling merchandise at flea markets, farmers markets or other venues with Square readers.
2.75% ? Ouch...
Fairly standard in the industry for this type of product.
There seems to not be a lot of thinking outside the box in the comments so far except Eric.
I have an original Square reader as they were free for opening an account online ($10 in a store like Apple).
I fix up and sell the occasional computer and it works perfect when I negotiate a price. Or I have had friends sign up and use it at their garage sales in helping sell some slightly higher ticket items like furniture and electronics where people don't usually bring a few hundred in cash to the sale.
And I totally agree with Eric, flea markets, farmer's markets, hell even lemonade stands could be target markets for Square. 2.75% isn't that horrible versus what the other options are. No minimum transactions, no commitments or contracts.
We even have an iPad/iPhone repair guy that comes to us at our sites and he uses it.
$49 for the new version is not that bad for what it is going to provide in my opinion.
I can see how there is potential for growth in this area. If PayPal is the king in your country then this is still a good thing as competition might have them lower rates to fight for business. We can only hope.
That 2.65% for Square with next day availability of the funds looks comparatively attractive for many smaller companies. it was all those "other fees" (and yes we owned our own terminals) that sent us looking for new processor options.
http://www.cardfellow.com/credit-card-transaction-fees/
I was paying a similar (but not quite that low!) discount rate. But now add in per transaction fees, annual PCI compliance fees, monthly terminal fees, monthly support fees, monthly "secure line" fees, IRS reporting fees. . . . Now take into consideration the number of days between the transaction and when it actually is deposited in your bank account.
Remember, Square charges the same rate on credit AND debit. I see an ad for Chase signature debit at 0.8%. Debit cards must be where Square is getting their revenue. Nationwide, I think the split between credit and debit is around 50% (depends on the business of course).
There seems to not be a lot of thinking outside the box in the comments so far except Eric.
I have an original Square reader as they were free for opening an account online ($10 in a store like Apple).
I fix up and sell the occasional computer and it works perfect when I negotiate a price. Or I have had friends sign up and use it at their garage sales in helping sell some slightly higher ticket items like furniture and electronics where people don't usually bring a few hundred in cash to the sale.
And I totally agree with Eric, flea markets, farmer's markets, hell even lemonade stands could be target markets for Square. 2.75% isn't that horrible versus what the other options are. No minimum transactions, no commitments or contracts.
We even have an iPad/iPhone repair guy that comes to us at our sites and he uses it.
$49 for the new version is not that bad for what it is going to provide in my opinion.
I can see how there is potential for growth in this area. If PayPal is the king in your country then this is still a good thing as competition might have them lower rates to fight for business. We can only hope.
Exactly. Square is not going to be used by a regular physical retail business that has numerous credit card transactions every day. It's used by freelancers, people at street fairs and conventions and people who must take payment in mobile situations. It's being used by people who never before accepted credit cards directly. More likely, they tried to get people to pay via Pay Pal and PayPal enabled those people to pay with a credit card. But there are a lot of fees there as well.
Getting paid reliably and faster helps make up for the % fee. And as any merchant will tell you, enabling people to pay with a credit card increases sales. People can also estimate that half of their customers charge and then simply raise their prices by about 1.4%.
Making it compatible with ApplePay is great.
My wife has been using Square for a couple years for her small business. From what I remember at the time, their transaction fee was in line with what other companies charge, but Square was the most convenient for her to start using: free credit card reader and app, and just set up an account on line. Pretty easy.
Most of the fees charged are bogus and can be avoided! The only merchants that benefit by using Square or the others are very small ticket venders (read coffee shops etc) or garage sale venders. "Ouch" and "Double Ouch" were right! Hit me up for info if you can... [email protected]
for a small merchant thats not bad. if you have the volume to warrant cheaper then you dont need square.
...er, unless they dont have a card processor, of course, which is the point. the artists down at the square dont have POSTs or processors. but if somebody wants to buy a piece using credit card, theyll take a Square reader out of their pocket and swipe.
i think youll have a while to wait.