Today we talked about Merchant Service Providers and Mobile Payment options that you can use in your Snowie Shaved Ice Business.
I started the conversation concerning Merchant Services. Now, keep in mind, there are thousands of these companies with an equal number of approaches and rates to what was used as an example here. If there are merchant account providers that can knock the socks off of what these mobile payment providers can do, we are all ears.
However, I referenced an article from inc.com that talked about how many of these providers like to ghost the rates that you are actually paying. The two examples the provided were the following:
Merchant #1’s average ticket sale is $100 (U.S.). The discount rate is 1.65% and the per-transaction fee is 30 cents.
30 cents divided by 100 = .003 + .0165 = .0195 or 1.95%.
Merchant #2’s average ticket sale is $20 with rates and fees the same as those paid by Merchant #1. Look at the difference:
30 cents divided by 20 = .015 + .0165 = .0315 or 3.15%.
Merchant #1 will pay $1.95 for each qualified transaction of $100. Merchant #2 will pay $3.15 for $100 in sales volume, a difference of $1.20 for the same amount of sales volume at the same rate.
You can imagine how much this would increase if they dropped the average ticket sale to $4.00. Even if that transaction rate was less than 30, say somewhere around 10 cents, at $4.00 your rate would still be
So while the rate originally looks appealing, in the end you will often pay more than what you are being told by your provider. To be fair, they are disclosing your fees, you just have to do some additional math to really see what is happening.
Both Lyle and I have gone down the path that Square has stomped into place. They have their competition now, one of them being much stronger and appealing than I anticipated.
Amazon has come out with a product they call Amazon Local Register. They have an introductory flat rate at 1.75% through the year of 2015. This looks really appealing to me. However, my guess is that the three big players in this, Square, Amazon and PayPal will start battle a bit to gain and maintain customers.
If I did not already have an account with Square, I would be tempted to try Amazon. I will, however, still give some props to Square for the style that they have applied to their products and interface. They are just a good looking product.
We also talked about the benefits of starting to use these products as a register. Traditionally, you have not been able to really see how a retail day is going until the end of the day. By implementing some of these products, you can now have a minute to minute glance of how many shaved ice you serving to your crowd. You could see in real-time how some of your promotions are working.
There are many people out there that still only work with cash at their events. They do many events and feel like the availability of ATM’s and the speed of transactions using cash outweighs the benefits of accepting cards. I, as you know, am one of the biggest proponents of speed out there. When you have a process using our ice shavers and flavor stations that lets you serve a shaved ice to your customers every three seconds, that makes all the difference in the world to your bottom line and the satisfaction of the customer. When cards are concerned, it does pinch your time quite a bit, but you are now able to serve and satisfy every one of your customers. That, I believe, is a big deal.
So take some time and watch our Webinar concerning receiving payments at your Snowie Shaved Ice stand.
We will see you in two weeks where we will tour the newest version of the Snowie Shaved Ice Bus.