The way we pay for things is changing. Those credit-card keypads yielding paper receipts are giving way to a new group of mobile payment devices that merchants say charge cheaper swipe fees, and are faster and easier to use.
Recently, Starbucks signed on with Square, one of the more popular devices in the market. That means 7,000 Starbucks stores will process U.S. credit and debit card transactions with Square — thus linking the card reader with a major retailer.
An array of other devices are on the market, including Intuit GoPayment and PayPal Here. Others in the mobile payment mix include Groupon and Google. Several large retailers, including Wal-Mart, Best Buy, Target and others, recently announced they're joining forces on their own upcoming mobile payment method.
Here's how these systems generally work: Commerce companies provide a free card reader to retailers, who plug it into the headphone jack of their mobile phone. After customers get their card swiped, they sign receipts with their finger, and have the option to leave tips. Receipts are sent by text or email. Merchants are charged a percentage per swipe, with the remaining money from the purchase deposited into their account.
Square's iPad version, called Square Register, allows sellers to keep inventory of sales.
"I can also track what are my top sellers," said Emma Merisier, who uses the iPad version on her Charlotte food truck, SouthernCakeQueen. "That can help me decide what cupcakes I'm baking for the following week."
Some brick-and-mortar retailers say they became tired of other point-of-sale credit card systems that included hefty bank processing fees. Jason Glunt, owner of Salud Beer Shop in Charlotte, said he's saving about $250 a month by using Square. "For me, for what I do, it's perfect," Glunt said. "I'd rather spend my money on product, not on some fancy checkout system."
Mobile payment systems aren't foolproof, though — they're at the mercy of how fast phones and tablets can process the cards. Plus, systems can go down, meaning lost business among customers who no longer carry cash.
Some retailers worry about customers questioning guarantees that credit card information remains private.
And some merchants are surprised when there are delays with their deposits, which can run from one to three days, or longer, they say.
Tom Bartholomy, president of the Charlotte-based Better Business Bureau of Southern Piedmont, said that delay comes from some of these companies taking more time reviewing transactions, compared to banks, which may work faster.
Still, "it's a great market for merchants right now because there are a lot of players in the marketplace," Bartholomy said. "So they can shop the rates, and all the fees associated with it, and do Google searches, (Better Business Bureau) searches, and see what other merchants are saying about them."