Mobile Credit Card Processing: Written up in Information Week

Google Chrome Extension Powers Android-Based Payments

Android phones can now authorize transactions presented on a separate computer through the Chrome browser.
By Thomas Claburn
InformationWeek
July 6, 2010 05:20 PM

Google last week introduced an extension for its Chrome Web browser that enables computer-equipped merchants to complete Google Checkout transactions through Android devices.
The Android Payment Chrome Extension lets merchants with Google Checkout accounts generate a QR code image on their Google Sites-hosted Web store checkout page. When captured by an Android-based QR code scanning application, the QR code provides the Android phone with the necessary information to authorize the transaction.

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"While this payment method may not be perfect for all cases, we hope you find it useful for setting up a shop on the go and that it inspires further innovation in the mobile and payment developer communities," said Google Checkout engineer Peng Ying in a blog post.
Mobile payment innovation in the U.S. has been booming recently. Abe Solomon, CEO of Houston, Texas-based Prestige Merchant Services, says that mobile credit card processing is becoming more and more accessible. A year ago, he said in a phone interview, merchants who wanted a mobile credit card processing solution would have had to purchase ($500-$1,200) or lease ($60/mo or more) a wireless credit card processing device, and would have had to pay setup ($20-$50) and monthly access fees ($20/mo).

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Now, he says, there are mobile apps for smartphones from several different companies that make it easy to accept credit card payments on the go. "It has greatly cut down on costs and made it much more available for the typical mom-and-pop store," he said.

While Google Checkout and PayPal may have some fans, Solomon argues that traditional merchant accounts remain a better option for most small businesses. "Most people realize that if you're serious about accepting credit cards, the traditional merchant account is the way to go," he said.

A Google spokesperson wasn't immediately available owing to a company-wide holiday. Google Checkout is used by hundreds of thousands of merchants in the U.S. and the U.K, according to the company.

PayPal in particular, said Solomon, has had trouble with customer service issues, alienating many merchants as a result. He claims that Google Checkout is more expensive than a traditional merchant account.

Google Checkout fees are: 2.9% + $0.30 per transaction for transactions less than $3,000; 2.5% + $0.30 per transaction for transactions from 3,000 - $9,999.99; 2.2% + $0.30 per transaction for transactions from $10,000 - $99,999.99; and 1.9% + $0.30 per transaction from transactions of $100,000 and greater. There are no gateway fees, monthly fees, or setup fees.

Solomon says that fees for merchant accounts vary, based on risk. Payment card companies, he said, consider mail-order or telephone-order transactions (MOTO in industry parlance) to be riskier since the physical card is not present, so they range from 2.1% and up, depending on the card. The risk for swiped cards is lower, so fees might be in the 1.69% range for credit cards or 1.49% for debit cards.

The issue that he sees among merchants is one of awareness. "The problem is that I think not enough people are actually aware that the [mobile payment] technology even exists," he said. "Most people I speak to say, 'Wow I didn't even know you could do that.'"

In June, Gartner said that it expects the number of mobile payment users worldwide to surpass 108.6 million this year, a 54.5% increase from 2009. Mobile payment users are expected to represent 2.1% of all mobile users in 2010, though in the U.S. the figure is expected to be about half that, at 1.1% or 3.5 million mobile payment users.