Category Archives: Square comparisions
Square Credit Card Processing Versus a Merchant Account
Many of our clients are interested to know the difference between Square credit card processing and a merchant account. Here are a few important distinctions merchant should be aware of when researching the two methods.
Funding and Deposit of Credit Card Funds
Square limits the weekly deposit amount to $1000. The rest of a merchant’s funds are deposited after 30 days. For example, if you process $10,000 for a catering event, Square will give you $1000 next day but will hold on to the remaining $9000 for the rest of the month. Talk about serious cash flow limitations for everyday business costs.
A PaymentMax merchant account will deposit all funds next day as long as transactions are not deemed high risk. This can occur when a merchant processes outside of their declared average ticket and monthly volume amounts. For example, if you declare an average ticket amount of $10,000 for your catering company, and you process a transaction for that amount-you will receive all of the funds next day.
Business Image
Anyone can obtain a Square account. Babysitters, dog-walkers, your best friend who has loaned you money are all square candidates. Square’s slogan, “the friendly neighborhood way to pay” describes it’s client base.
A merchant account, on the other hand, is only available to legitimate businesses who provide proper documentation. A merchant account displays a more professional image to customers.
Pricing
Square boasts about transparent pricing on their website 2.75% for swiped, and 3.5% plus .15/transaction for keyed in. This flat rate sounds appealing but what about if you have a chargeback? or a return? There are no mention of these fees on their website.
A merchant account looks at every business differently. The lower the risk the lower your rate. The more transactions you process the lower your rate. The longer you have been in business the lower your rate. Square meshed all the business types together and came up with a flat rate. Many businesses will receive rates much lower than 2.75% and 3.5% (plus .15/transaction). Take the time to receive rate quotes from merchant account providers and compare them to Square’s rates.
For more information on merchant accounts, next day funding, or smartphone credit card processing visit www.paymentmax.com
Mobile Credit Card Processing and Network Errors
Merchants who accept credit and debit payments in a mobile environment (using smartphones) must realize that not all mobile credit card processing apps work when the network (service provider)is down.
The ability to store credit card transactions when the network is down (offline) can be a crucial advantage to merchants that frequently accept payments in remote areas or in “black-hole” areas in the city.
ROAMpay mobile allows for offline transactions. Square does not!
This is how it works. If the network is down and you have ROAMpay mobile-the transaction will be held until the network comes back online. There are never any lost sales because of no signal. If you have Square and no signal..too bad! No signal equal no sale.
For more information on accepting credit cards with smartphones, ROAMpay, or to get started visit www.paymentmax.com
Square Credit Card Processing Security-Is it Skimmer Safe?
Are your Customer's Proctected?
I wrote (in a previous blog) about Square credit card reader’s vulnerability to skimming because it cannot encrypt cardholder data. Square’s reader lacks a processor and power circuits, relying on the phone to digitize and encrypt data. This places cardholder data “out in the open’” for anyone to grab and use illegally.
Well…Verifone, a global leader in secure electronic payment technologies, did just that! Used Square and Skimmed.
Here is what Verifone stated in an open letter, “In less than an hour, any reasonably skilled programmer can write an application that can skim or steal a consumer’s financial and personal information right off the card utilizing an easily obtained Square card reader. How do we know? We did it. Tested on sample Square card readers with our own personal credit cards, we wrote an application in less than an hour that did exactly this.”
Pretty scary considering that anyone can obtain a Square credit card reader.
For more information on PCI compliant, encrypted, secure mobile credit card processing solutions like PAYware Mobile, ROAMpay Mobile, and AprivaPay visit www.paymentmax.com.
Square Credit Card Reader Meant for Peer-to-Peer Transactions Not Real Merchants
In a previous blog, I wrote about some differences between the Square mobile credit card reader and ROAMpay Mobile credit card reader. Since then, ROAMdata published some interesting comparisons in their February 16, 2011 blog, “Who are Square’s Real Competition?” that I wanted to share with our readers.
The first comparison they make is that Square is meant more for peer-to-peer transactions. Anyone can sign up for a Square account. Have a friend that owes you money? Go ahead and sign up for Square. Your cashless friend can now pay you with their credit card. However, if you are a real merchant processing hundreds of thousands of dollars you may be surprised to know that Square probably is not the best choice for you.
Square’s credit card reader is very cheap to make, but card security and read rates are sacrificed. This may not affect low volume processors (like peer to peer) but merchants processing large volumes will certainly feel the difference. Here are a few key differences.
1. Encryption (Card Security)-ROAM technology uses sound waves to digitize and encrypt card data before transmitting card data to the device. Card data remains encrypted until received by a PCI certified payment server making skimming virtually impossible. Square’s application, lacking in processor and power circuits, rely’s on the phone’s application to digitize and encrypt card data. This places cardholder data out in the open for any other application (skimmers) to grab. Dangerous business practice for high volume merchants.
2. Square’s reliance on the phone’s application for capturing analog track data also presents numerous issues. There are greater read errors and less compatible devices. ROAMpay’s robust physical and electrical design and high compatibility rate make read rates much higher. A definite plus for high processing merchants.
3. ROAMpay device compatibility is the best in the industry. It works on all iOS, dozens of Android phones and tablets, most BlackBerry devices, as well as PC ‘s and netbooks. Square has faced numerous IP issues and are limited to a small amount of devices.
It should also be noted that ROAMpay is not a merchant services provider. It is merely a provider of technology and service to the mobile commerce community. PaymentMax is a ROAMpay preferred merchant services provider and can have you accepting credit card payments on your smartphone quickly and easily.
For more information about mobile credit card processing visit www.paymentmax.com.
Square Credit Card Reader Versus PAYware Mobile Encryption Sleeve
The Square credit card reader has been getting a great deal of attention these days, giving rise to many questions here at PaymentMax about the differences. Here is a look at the differences between the Square credit card app and reader and Verizon PAYware Mobile encryption sleeve and mobile credit card processing app.
1. Transaction Disputes-Square has known issues with transaction disputes. First, if you have the tip function enabled customers will see a 40% increase on the authorization of their card. Customer’s are generally not happy with any authorization over the amount of the purchase. This can spark disputes.
Second, if a transaction was not completed using Square. The transaction authorization may pend on customer’s bank account for a few days. Pending authorizations tie up customer’s money and will most likely cause issues, especially for uncompleted transactions.
2. Stylus- PAYware mobile offers a stylus pen for capturing customer’s signatures. Square requires customer’s to use their finger.
Geo-tagging with PAYware Mobile
3. Geo-tagging-PAYware mobile offers users the ability to track their customer’s geographic location with Geo-tagging. This feature notes the nearest street or latitude and longitude coordinates. Perfect for tracking where most of your business occurs.
4. Delayed ACH-Square (which is not a merchant account) does not put a limit on how much you can accept with their service, but it will hold any processing funds over $1000 for 30 days. In some cases 45 days. PAYware mobile requires a merchant account, and depending upon the provider- funds may deposit next day with no automatic hold structure.
5. Twitter Account- Square requires a Twitter account before signing up for Square. PAYware mobile does not require a Twitter account to process credit cards.
iPad Credit Card Processing
6. Compatible Devices-PAYware Mobile is compatible with iPhone 3, 3GS, 4 and ipad, ipod touch (manually entry). Square is compatible with the same Apple devices and some Google Android smartphones.
*For iPad Credit Card Readers ROAMpay and Square are compatible.
For more information on accepting credit cards on smartphones, differences between the credit card processing apps, next day funding , or PAYware mobile visit www.paymentmax.com.
