Why Get Paid Later If You Can Get Paid Now?

You use your smartphone to get your email, surf the net and share news. It may even be an essential business tool, but could it do more? If you’ve seen the commercials on TV showing people processing credit cards on their mobile device, you may have wondered if this option would work for you.

Basically, there are two types of apps that process credit cards. With one, you simply type the information into the app using you keypad. With the other, you plug an attachment into your device and swipe the card. In either instance, the customer signs for the payment right on your device using their finger or a stylus.

This new technology makes processing credit cards easier and cheaper for many small businesses. The following are a few reasons some business owners are adopting this technology.

Get paid anytime, anywhere.

If you’re like most small business owners, accounts receivable is a big headache. Are you getting paid on time? Is there enough cash flowing into your business to keep it running? Imagine closing a deal and accepting a down payment at that same meeting.

“Depending on your system, this instantaneous payment can cut 30 to 90 days off of your payment cycle, improving your cash flow and your ability to do business,” said Dave Cain.

Cut costs.

If you pay for an expensive credit card processing machine, now’s your time to ditch the machine and high rental price. Mobile credit card processing isn’t free, but it’s much less than you’re used to paying – processing fees tend to range from 0.38 to 2.75 percent, plus $0.10 to $0.30 per transaction.

Improve customer experiences.

“Accepting mobile credit card payments doesn’t just make your life easier, it helps your customers, too. And it can have a positive impact on your customer relationships,” said Mark Fearon, principal, New Philadelphia office. “For customers who prefer to pay by credit card, they’ll appreciate not having to carry cash or a check.”

Prevent fraud.

If your business accepts cash payments, you know that it’s hard to keep every dollar accounted for. “Without records of what’s coming in, it’s difficult to know what made it into the till – and what might have ended up in someone’s pocket,” said Annie Yoder, senior manager, New Philadelphia office. Unlike cash payments, credit cards leave a data trail. “You know exactly who paid, when they paid and how much they paid,” she said. No small business is completely immune from fraud, and this is just one additional safeguard to make sure that your payments don’t fall into the wrong hands.

If you’re interested in accepting credit card payments on your smartphone, there are many different mobile payment terminals to consider. When selecting a processor, consider the fees you’re likely to pay and the security standards. To protect yourself and your customers, look for processors that are PCI compliant, offer SSL encryption and are password-protected.

You carry your mobile phone to make life, and business, easier for you. Now may be the time to have it literally help you bring in the dollars.

This article was originally published in The Rea Report, a Rea & Associates print publication, Fall 2012/Winter 2013

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.