Intuit Inc. is offering its GoPayment mobile-payment service with free card readers and no monthly service fees to small merchants who sign up by mid-February, the Mountain View, Calif.-based company announced Jan. 10.
Launched in May 2009, the GoPayment service enables mobile merchants to accept payments through Intuit’s online gateway through a product called Complete Credit Card Solution (
The readers, supplied by Roam Data Inc., work on a variety of smartphones, including Google Inc.’s Android devices, Research in Motion Ltd.’s Blackberry phones and Apple Inc.’s iPhones. Intuit enhanced GoPayment’s mobile credit and debit card acceptance service for the iPhone in August (
The mobile card readers and service work similar to an in-store POS terminal, and payment funds settle into merchants’ accounts within two or three business days.
Intuit is offering the readers and monthly service for free to respect small businesses concerns, an Intuit spokesperson tells PaymentsSource. “Many small businesses, such as merchants selling products at street fairs, dog walkers and wedding photographers, were worried about the upfront investment for mobile card readers because they were not sure how often they would them,” she says. “We really wanted to target those small merchants, or microbusinesses, that process less than $1,000 per month.”
Historically, few affordable options were available to accept card payments, the spokesperson says. Many merchants had to rent wireless terminals, which are often quite costly.
In fact, the introduction of mobile card readers such as GoPayment may mean trouble for the traditional wireless-terminal market (
Besides receiving free card readers, participating merchants will not have to pay the normal $12.95 monthly service fee indefinitely, the spokesperson says. But they will pay a discount rate of 2.7% of the sale for swiped cards and 3.7% for keyed-in transactions, she explains. The company also applies a 15 cent transaction fee for both credit and debit card purchases.
In comparison, Intuit charges larger mobile merchants, such as construction companies or plumbers, a 1.7% discount rate for swiped card transactions and 2.7% for keyed-in purchases, the spokesperson says. Such merchants still pay the monthly fee and 30 cents per card transaction.
For merchants processing less than $1,000 per month, the no-service-fee option makes sense because they do not use the readers very often, the spokesperson notes.
Intuit’s decision to target small merchants comes as a number of companies are providing similar mobile-payment services, and Intuit needs to ensure it can gain market share, says Gwenn Bézard, co-founder and research director at Boston-based Aite Group LLC.
In the U.S., millions of small businesses do not yet accept card payments, Bézard says. With this type of mobile service, they may have an easier way to accept cards, he adds.
Additionally, interchange reform may “create a boost for card payments, especially debit, because merchants can accept the payments at a lower cost,” Bézard says. Some smaller merchants even may encourage consumers to pay with debit cards because of the lower interchange, he notes.
Indeed, while only a small portion of small merchants may embrace mobile-based card acceptance, Aite expects the U.S. mobile POS market to increase to $55 billion by 2015, up from an estimated $1 billion in 2010, Bézard says.
