Product Review: The Best (and Cheapest) Way to do Business ‘On-The-Go’

October 11, 2011 0 Comments

For many founders, one of the proudest moments of their start-up is making that first sale. Moving from pre- to post-revenue can mean a lot of things for your business, but it definitely ushers in a new set of responsibilities. How to accept payment, and which forms of payment to accept, for your products or services is one of the questions you’ll have to ask yourself. And as not all forms of payment are created equal, and some require more effort than others, it can be an important question.

According to the Federal Reserve Bank of Boston, 52% of purchases made in 2010 were through debit and credit cards, a figure which suggests that in order to serve the most customers, business owners can’t rely just on cash or check – they have to offer plastic. Though convenient for the customer, the option of taking credit or debit has been a considerable hassle and expense for small business owners, even with payment technology improving each year.

But not anymore.

In 2009, with the release of the iPhone 3GS, Apple launched the new ‘there’s an app for that’ campaign. More than an advertisement, this message was an open invitation to developers, innovators, and entrepreneurs to solve popular problems with an iPhone app. Among its competitors, Apple has an advantage, with over 18 billion downloads since the launch of its famous App Store in 2008; the latest news shows that they’ve paid $3 billion to developers who bring their ideas to the App Store. In a sense, the rise of the smartphone industry fostered a movement of ‘apps by entrepreneurs, for entrepreneurs’.

Big, already-established companies also created apps providing a connection to their product(s)/ service(s) that would connect with a generation of busy, ‘on-the-go’ customers. In 2010, popular finance software company Intuit released GoPayment, a device and app combination which allowed merchants and small business owners to ‘get paid on the go’ without the hassle of traditional equipment.

Later that same month, Intuit’s GoPayment met its first serious competitor – Square. Offering a similar product, one of Square’s major differences was that it was itself a ‘small business’ – its own company, capable of competing with Intuit in a way that made it popular among small business owners, who could relate to the new company and their efforts.

But for many, the bottom line is which product is truly better and most affordable. Here’s how Intuit GoPayment and Square stack up against each other, along with our verdict (see the big gold start) on which is better:

Device:

Both devices attach to the smartphone or tablet by connecting to the audio port. They accept a wide variety of cards including Visa, American Express, Discover, and Master Card.

Intuit GoPayment: The card reader itself is larger than Square’s, however it has a longer slot for swiping cards. In reviews, this difference has provided more reliability, ensuring that the swipe registers and can be processed. Square users reported needing to swipe a few times before succeeding. Intuit GoPayment also comes in a clear plastic case with a lanyard attached.

Square: The Square device is incredibly small (about the size of a quarter) and is also more stylish than its competitor. However, its size and lack of a stable ‘grip’ on the phone or tablet can make getting a swipe an awkward task. You may have to set the device down, or really concentrate on getting an evenly paced swipe in order for the payment to be processed. There is also no carrying case or lanyard for Square, making it potentially annoying to tote around.

iPad and Tablet Apps:

If you want to make quick sales, you’ll need a comprehensive app that can effortlessly guide you through the process. Both companies offer a tablet app which allows you to customize your own items with pictures, descriptions, and prices.

Intuit GoPayment: Takes advantage of iPad technology by functioning in both portrait and landscape modes. However, GoPayment requires a password each time the app is opened, and sends email receipts which can sometimes be flagged as a phishing attack.

Square: Limited to the iPad only, and portrait mode only, Square has its drawbacks, but still manages to offer a superior tablet experience than GoPayment. You only need to sign in once, and the service will keep that session open until you manually log out. Reviewers have also noted an easier-to-acess keyboard which allows you to enter purchase amounts with ease.

Smartphone Apps:

A NetworkWorld article from August explains that Android phones are steadily growing in popularity. In the second quarter of 2011, Android reported the sale of 51.9 million units, a five-fold increase since the second quarter in the year before. Luckily, both Intuit GoPayment and Square apps share the same look and functionality across the iPhone and Android, but each service has it’s unique traits:

Intuit GoPayment: Allows the user to create a list of items with pre-set amounts. The user can also choose to swipe a card first, and then enter in a purchase amount.

Square: Does not offer the options that GoPayment does above.

Money In the Bank:

One of the coolest things about using either one of these products is that purchases are transferred to your business’s checking account wirelessly, effortlessly, and hassle-free. The only difference comes down to immediate versus a short wait..

Intuit GoPayment: When a card is swiped or keyed in, GoPayment treats each individual transaction as a transfer, allowing you to access your money sooner.

Square: Sums up all of your transactions, and deposits them at the end of the day in one transfer.

Customer Support (Or Lack Thereof)

Both companies have been known to offer support for their products and replace defective card terminal devices for free. How does the customer satisfaction stack-up?

Intuit GoPayment: Effortlessly has an advantage over Square by offering easy-to-acess customer service. Simply call the hotline listed on the homepage website and be connected to a representative at a local call center.

Square: Offers a support hotline which is essentially impossible to find on their own website. Once you call, the line goes directly to a voicemail account.

Pricing:

In competing with one another, Intuit GoPayment and Square have frequently altered their prices to lure customers to their service. One of the most impressive elements of both services is that they send you the card reading device, along with allowing you to download the app free of charge. So once you begin using the product, which one is truly cheaper?

It's a tie!

Intuit GoPayment: If you make over $1,000 worth of charges each month, Intuit will charge you a $13/month service fee. Low volume membership charges 2.7% per swipe and 3.2% for keyed-in purchases while the high volume option charges only 1.7% and 2.7% respectively.

Square: No monthly fee! Flat rate charge of 2.7% on all swipes and 3.5% on all keyed-in purchases. Additional fee of .15 on all purchases.

The Bottom Line:

If you decide that you want to be able to process credit or debit card purchases from your mobile phone on the go as part of your small business, you’ll want to evaluate your options. Though the Intuit GoPayment is a clear winner, it isn’t right for everyone. Have you tried either service? How are they and which would you recommend to a friend?

Let’s start a discussion in the comment section below. Who knows, your input could inspire a follow up!