I'm in the line at Starbucks with my client and he's on the phone with one of his mentors. The mentor tells him that he was considering purchasing his (the startup client) product, but his assistant didn't know where to send the check.
"Does she have all the account details?" my client asks.
"Yep!" his mentor responds.
"Well can you transfer me to her and I can take the payment now." He gets transferred and the next thing I know, we're ordering lattes and he's taking a credit card payment right there on his Ipad.
The product is two weeks old and still in beta. This guy is brand new to business and doesn't even know what a "merchant account" means. But he's collecting payments while getting coffee. Pretty neat if you ask me.
You know how that idea takes over your thoughts and focus until you find yourself wondering what if? What if this could be a seller? What if this was IT? Well, you'll never know if you didn't come up with a method that allows people to pay for your product or service during the test phase.
One way you can make this happen is by coming up with an easy method to collect payments for your test product or service.
Payment Processing Tools: The Pros & Cons:
Google offers a quick merchant checkout that can be added to your website or blog. You start by signing in with your Google account, or create one and the steps are pretty simple after that. The transaction fees depend on how much you sold during the previous month. So if your sales were less than $3000, you're charged 2.9% + )$0.30 for each transaction.
Benefits: Google users will have a quick and hassle-free checkout. Also, the Google checkout badge helps your product appear in search listings.
Downside: Shoppers may have to sign up for Google checkout if they don't already have an account.
Square gives you a really convenient way to accept payments from your cell phone or Ipad.
You sign up and get:
- A free credit card reader for your phone
- An account to manually enter your credit card number via your Ipad
Low transaction costs. 2.75% per swipe. This is the only figure--lower than other checkouts-- that you have to worry about paying.
Convenience. Once you have your phone or Ipad, you can accept a payment in the food line or at the airport.
Smart Receipts. You can actually turn your Ipad into a checkout register, have your client sign their receipts, and email it directly to them.
Downside: In the past, you had to wait a while to get approved, and receive your card reader. It seems that Square now has a "fast setup" option (one that we haven't tried yet). One thing to keep in mind is that if you're receiving bigger payments from clients, you may get $1000 deposited into your account, and there is usually a 30-day wait for the rest.
By now, you're familiar with PayPal. But have you gotten acquainted with PayPal for Business? With PayPal Merchant Services, you can design your website to accept payment online, or you can accept the payment on the phone (if you choose the Paypal virtual terminal option). Or, you could also send email invoices to your customers.
What you pay PayPal: $3.20 per $100 transaction.
The design factor. You or your graphic designer, can design your paypal button to fit your website branding (this way you don't have to have the generic paypal button on your website).
PayPal Virtual Terminal. A lot of small business owners wish they had the option of simply collecting payment on the phone or in person (when necessary). When a client hands you a credit card, you don't want to pass up the opportunity because you need to "go home and send them an email with your Paypal payment site." Paypal virtual terminal acts like a regular "merchant service credit card processing." I was really impressed when I saw a business owner do this: you can simply sign on to your own website and take the person's credit card number and address. Then boom! You're paid.
Downside: If someone already has a PayPal account and they're trying to use another card or option, sometimes the system keeps recognizing them and it may cause some checkout hassle.
Authorize offers you a POS (Point of Sale System) that attaches to your cell phone or Ipad. In addition, there's a merchant site for checking payments, etc.
Benefits: Customer service department for potential issues. Lower transaction fees.
DownsideThe setup: You need a merchant services account on the back-end (so you end up paying more since you have merchant services fees) and you need to contact a reseller to inquire about pricing and setup.
Use Authorize if you already have a merchant services account and need to be able to contact someone directly if something goes wrong.
Your Thoughts: Things change quickly with technology, so is there something I missed with any of these tools? Have you had any experience with any of these? Feel free to leave a comment with your thoughts.
Cheryl Isaac is a business strategist and entrepreneur who has been in love with startups and their idiosyncrasies for years. She is a former investment and small business banker who believes in making business personal, an author, international business contributor to Forbes, and the founder of StartupBizTalk. You can find her here on Twitter and Facebook.