Technology for the day

The New York Times has an article by Martha White on mobile card-processing:

People do not carry as much cash as they once did, relying instead on debit and credit cards for even a cup of coffee. But, until recently, entrepreneurs, trade show exhibitors, and other small-business people who sell products on the road had to lug around a bulky machine and a stack of paper slips to process the cards, or risk losing business.
Alesia Shute, an author whose childhood battle with cancer became the subject of her writing, motivational speaking, and advocacy career, said she lost book sales because she did not accept cards. “A lot of people don’t carry cash anymore,” Shute said. “They’re not carrying their checkbook in their handbag. They’re carrying a debit card.” At one fund-raiser, she said, she had to send a would-be donor to an ATM for cash.
About a year ago, Shute joined a contingent of small-business people using a new device that has revolutionized the payments process by allowing anyone with a smartphone or tablet that uses the Apple or Android operating system to process credit and debit cards.
Users say processing transactions with mobile readers— small attachments that plug into a phone’s headset jack— is quicker, cheaper, and less cumbersome than using the old machines that make hard-copy imprints of cards, called “knuckle busters” in industry slang.
“The biggest thing is the portability,” said Steve Chorazewitz, chief operations officer of Bottle Docker, a company that manufactures accessories for beverage containers. He exhibits the company’s products at consumer trade shows, festivals, and other events several times a year.
Sara Selepouchin, an illustrator who travels once or twice a month to sell her line of embellished housewares at craft and trade shows like the New York International Gift Fair, said she, too, had been converted. “When I travel, I try to slim down as much as I can,” she said. Her card reader is so small, “I put it in the change purse of my wallet,” she said.
To process a payment, a customer’s card is swiped through a slot in the reader and the data is sent to a mobile application on the merchant’s phone. Customers “sign” the screen using a finger and a receipt is sent to the buyer’s email address or cellphone as a text message.
The mobile payment tools also help protect customers’ credit card information, said Philip Blank, managing director for the security, risk and fraud practice of the financial services research company Javelin Strategy and Research. No hard copies exist for a thief to steal. Buyers’ card information is not stored on the seller’s handset, and customer account information is encrypted, he said. “The problem with the old-school machines is it’s very easy for someone to make a copy” of the printed card information, Blank said.
Selepouchin said the reader gave her peace of mind in this regard. “It always made me nervous because I’d be walking around with not only cash but 75 or 100 people’s credit card information in paper form,” she said. “It wasn’t secure at all.”
A few players operate in this field. Square Inc., begun in 2010 by Jack Dorsey, a Twitter co-founder, is one. eBay introduced its PayPal Here device in March. Intuit, the tax and accounting software company, offers a similar device called GoPayment.
In March, Eventbrite, the online ticket seller, introduced a credit card swiper that plugs into an iPad’s charging slot and is aimed at organizers of conferences, concerts, and other events. Eventbrite’s device can be used to sell tickets and merchandise at event sites.
Megan Quinn, director of products for Square, said that more than half of the merchants using Square had not previously accepted credit cards. “By accepting credit cards on Square, they’re actually processing more transactions and seeing greater profit,” she said.
Processing payments via smartphone also speeds the payments, generally completing them within a couple of days at most. Processing hard copies of credit card payments could lead to a delay of at least several days before a payment was posted to the merchant’s bank account.
“Using carbon copy paper was ridiculous to be doing in 2008,” Selepouchin said. Data entry was equally archaic. “I would have to take all those numbers and manually enter them,” she said. “I’d end up taking four hours at the end of every show.”
Mobile readers are also cheaper than traditional processing systems for credit card payments. Square, PayPal, and Intuit charge a little less than three percent per transaction. Chris Hylen, vice president and general manager of Intuit Payment Solutions, said it offered a plan that charged a monthly fee in exchange for a lower percentage per transaction.
Chorazewitz said most customers were receptive to paying by mobile device and receiving a digital receipt. Since switching to mobile payments, he said he had encountered only one customer who insisted on a paper receipt, which he said he printed out and sent by mail. “The only reason why we’re able to do this now is so many people have purchased things online that it’s not a foreign thing, even for older folks,” he said.
Some event organizers have begun using mobile payment tools for on-site registrations, streamlining a process that one conference planner said used to keep her awake at night. “It was so bad,” said Michelle Villalobos, founder and chief education officer of Mivista Consulting. “That was the reason why we needed to make a change.” Her company runs sales and networking seminars and conferences aimed at entrepreneurial women. Guests can sign up for the events online using PayPal, or register on-site. In the past, Villalobos had to set up laptop stations to take payments from people registering on the first day. The process was slow, especially for registrants without PayPal accounts. “We’d have a line backed up of people trying to pay on our computers,” she said. Using Square to process payments at a recent conference in Florida that drew about 650 participants eliminated the logjam, she said. “It went so much more smoothly this time.”

Rico says this is a major step forward; if he had a need for it, the Square looks like a great solution...