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.

Credit Card Processing at Hotels: Is it Safe?

Evidently any time you have a point-of-sale system that is computer based there is a potential for problems. As long as that computer is connected to the internet it has the ability to be hacked and have credit card information stolen from it. The story surrounding Destination Hotels is proof of just that: Guests who recently stayed at 21 of the resort's 30 hotels may have been victimized by the scheme, which appears to have compromised point-of-sale systems. The company refused to release many details of the incident -- citing an ongoing investigation by the U.S. Federal Bureau of Investigation -- but in a note posted to its Web site said that it had "uncovered a malicious software program inserted into its credit card processing system from a remote source."

Makes you think twice about giving your credit card information at a hotel doesn't it?

July 4rth is also Cash Only Day!

In an effort to thwart the Durbin bill in congress that will regulate interchange fees, there is a movement proposing July 4rth be Cash Only Day! Now of course you might want to take a close look at the bill Durbin has proposed. It's really difficult to say what the outcome of this bill will be at this point. Will it help or hurt the consumer?

Processing Credit Cards on Your Cell Phone

It's unbelievable how many people are unaware that you can process credit cards on your smart hone.Mobile credit card applications are now available on the iPhone, iTouch, BlackBerry, Google Inc. Android and Microsoft Corp. Windows Mobile. Furthermore, while the service is obtained as a mobile download, it can be accessed through a Web portal on any computer, affording merchants a more encompassing view of reporting data than what's available on the tiny screen of a handheld phone. Merchants can also connect to the  gateway and conduct payments from desktop or laptop computers. The mobile application has a companion product in the MagTek Inc. encrypted card reader for merchants who want to conduct swipe transactions for even lower rates. For more information on accepting credit cards on your cell phone you can contact Prestige Merchant Services. This technology really affords people on the go, real affordable credit card processing options. Until recently you would have had to purchase a wireless card reader (cost-$499-$1200) and pay expensive wireless monthly fees ($15-20 a month) as well as set up fees ($20-50) or lease it ($60-100 a month plus wireless fees).

Inner Fence: Giving Square a Run for the Money?

Everyone is talking about the Square and it's capabilities to turn an Iphone into a mobile credit card machine.

Inner Fence along with Merchant Focus has acquired a competitor, Appninjas who had created the popular swipe program which allowed you to accept credit cards on various smart phones by keying in information. Now Inner Fence wants to promote hardware allowing you to swipe the credit card for lower fees. The problem is that now this is no longer an independent application perhaps. With the free software and hardware Inner Fence plans to give out there will surely be contractual obligations perhaps for 3yrs. That is why Merchant Focus was so interested in acquiring appninjas and their popular application as it will allow them to entice new merchants.       

Senate approves Debit Card Swipe Fee Limits

Bloomberg reports that the senate approved debit card swipe fee limits:

Lawmakers voted 64-33 yesterday to approve the measure from Senate Majority Whip Richard Durbin, who seeks to ensure that debit-card interchange, or “swipe” fees, charged to merchants “are reasonable and proportional” to the cost of processing transactions. Payment networks Visa Inc. and MasterCard Inc., which set interchange rates and pass the fees along to card- issuing banks, fell in early trading.

The amendment permits retailers to offer discounts for cash, checks or debit cards, or for a particular card brand, and would let merchants set minimums and maximums for credit-card purchases.

On one side you have the politicians stating that passage of the bill will help small business. Now they can fight against these high fees. You have MasterCard on the other side stating :“The Durbin amendment would give lobbyists for big retailers what they have been unable to achieve through other efforts -- the ability to maintain all the benefits they receive from debit-card acceptance while transferring the cost to consumers."

BBB Says " Beware of Credit Card Processing Scams".

Via the St. Louis Globe:

Several owners of small businesses say they were duped by a salesman who promised to save them money on credit card processing fees, but instead tricked them out of hundreds of dollars and locked them into long-term lease agreements they did not want.

The Better Business Bureau (BBB) suggests caution when dealing with Eric W. Sutton, who has operated under the name Providence Place Development. The firm has an “F” grade with the BBB, the lowest grade possible.


The owner of a sports card and collectibles shop in St. Peters, Mo., said Sutton reneged on promises to return a $350 deposit, pay off a $100 early cancellation penalty with the owner’s old credit card processing company, and pay him up to $400 for the shop’s old credit card terminal and check machine, which Sutton took from the store. The owner said Sutton also tricked him into signing a four-year, $117-a-month equipment rental agreement.

“He had me hooked like a big old bass,” the store owner said

Several other business owners recounted similar experiences with Sutton.

The owner of a West St. Louis County sunglasses business said Sutton promised him a flat $50 a month credit processing fee, with no percentage fees on his credit card sales. Instead, he said, he found himself locked into a four-year, $59-a-month contract with percentage fees. He said he has been paying on the credit card processing machine for nine months, even though it sits unused in a closet at his home. “He told me, ‘I will take care of everything.’ He did take care of everything; he took care of everything for himself.”

Michelle Corey, president and CEO of the BBB, said area business owners should be constantly on guard against salespeople who “promise huge discounts. While most salespeople are honest, business operators should get everything in writing and be sure they completely understand any agreement before signing it.”

The BBB offers the following tips for businesses dealing with outside salespeople:

• Do not meet with a salesperson during busy working hours. It’s too easy to become distracted. It’s important to listen closely to all terms of an agreement and read all documents carefully before signing anything.


• Do not sign a blank agreement or agreements that appear to be incomplete. Also, do not accept a salesperson’s word that you can ignore certain terms in a printed agreement.


• Never give a deposit to a salesperson unless you know how it will be used. If a salesperson promises your deposit will be refunded, make sure you get the promise in writing.