ND1103114

Title: To Square or Not To Square

Description: MobileBeat.com takes a look at whether retailers should adopt the Square mobile payment service.

Page Content:

SAN FRANCISCO ? MobileBeat.com provided a detailed look at mobile payment option Square earlier this week, assessing its utility for retailers.

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Since 2009, Square has become an increasingly popular payment option for merchants and consumers. The square dongle attaches to smartphones, allowing a quick card swipe to process a payment.

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Last week, the company reported that its product will be available at Walmart, the surest sign yet that the Square has hit the mainstream.

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What type of business should consider option for Square instead of a traditional merchant account?

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With flat pricing ? all transactions are charged 2.75-percent regardless of size ? the Square?s simplicity is enticing. But analyzing costs by business type reveals some winning and losing scenarios:

• Coffeeshop: ?Square really shines? for the coffeeshop business, Mobile Beat writes, assuming the average ticket size is $6 and traffic reaches 50 customers daily. Square?s per-transaction cost is $0.17, compared to 1.73 percent plus $0.21 per transaction for a competitive merchant account, or $0.31. Over a month, Square fees total $198, while the merchant account would reach $417 (including the cost of a wireless terminal). WINNER: Square.
• Boutique: With an average ticket size of $200 and 10 sales per day, 6 days per week, Square?s cost is $5.50 per transaction, vs. $3.67 for the merchant account. Over a month, Square?s monthly total is $1,320, versus $921.47 for the merchant account. WINNER: merchant account.
• Farmer?s market vendor: With an average ticket size of $15 and 100 sales every Saturday for a month, Square?s cost per transaction is $0.47, vs. $0.56 for a competitive merchant account. Over a month, Square?s cost totals $165, vs. $228.47 for the merchant account. WINNER: Square.
• Restaurant: Assume an average ticket size of $40 and 60 checks daily, which yields a $1.10 fee for Square and $0.90 fee for a merchant account. Total monthly cost for Square if $1,584, vs. $1,339.55 for the merchant account. WINNER: merchant account.

MobileBeat.com stresses its merchant account costs are competitive and that many retailers pay higher rates.

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Content Subject: Operations

Formatted Article Date: November 3, 2011

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