Sage Payment Solutions Inc. hopes to capture a new group of retail customers with the launch of a mobile service that provides small and midsize merchants lacking storefronts a low-cost option to accept credit and debit cards, the company announced Feb. 7.
“Mobile acceptance should not be seen as a standalone profit center but as another payment capability to help expand selling opportunities,” Greg Hammermaster, Sage president, tells PaymentsSource. “Our main focus for our customers is to reduce costs, increase visibility and increase revenue.”
And just because some merchants may want to accept mobile payments only, it does not mean they should pay a premium, he adds.
Sage’s mobile service works within the software used in more than 400 mobile phones and across all major wireless carriers, Hammermaster says. Merchants interested in using the mobile-payment option sign up for a free account with Sage and opt for the mobile option, he says.
Through the mobile option, merchants either may key in transactions using their phone’s keypad or an attachable swipe device that works with Research In Motion Ltd.’s BlackBerry and Apple Inc.’s iPhones and iPads. The optional card reader cost may range from free to $50, depending on the merchant, Hammermaster says.
Other vendors may charge no monthly fees but add on high processing fees, Hammermaster says. For example, some vendors may add 1% of the sale plus an additional 15 cents to 37 cents to the processing fees, which is well more than $130 in extra fees for every $10,000 in credit card volume, he explains.
To cut additional costs, “Sage is focused on a reasonable monthly fee and no additional markup on processing fees, which is much more cost effective for small and midsize merchants,” he says.
Sage’s mobile-payment service costs merchants a set-up fee of $50. Merchants also pay $10.95 per month with no other incremental mobile-processing or transaction fees.
The processing and transaction fees are based on transaction volume, the merchant’s industry type, the card brand and type and whether the transaction is swiped or keyed in, Hammermaster says. “Generally speaking, most credit and debit card transactions fall below 2% of the transaction value, whereas commercial cards and rewards-based credit care are a bit more expensive to process,” he adds.
By comparison, Square Inc. offers a free card reader but charges 2.75% of the sale for swiped transactions initiated with its mobile card-acceptance device and 3.5% for keyed-in transactions, and it applies an additional 15-cent fee for all transactions.
VeriFone Systems Inc.’s PayWare Mobile service comes with various pricing models because multiple resellers sell it. VeriFone’s suggested pricing plan is a $15 monthly gateway fee and a one-time $49 sign-up fee for merchants with existing accounts. Merchants also pay VeriFone 17 cents per PayWare Mobile transaction. Resellers, including acquirers, set their own rates and the card reader sells for $149.95 on Apple’s website, but some resellers may provide one at no cost, VeriFone says.
McLean, Va.-based Sage Payments is not the first independent sales organization to develop a low-cost mobile-payment service. North American Bancard, a Troy, Mich.-based ISO, in January announced a pay-as-you go mobile point-of-sale acceptance service for smaller mobile merchants (
Many players in the mobile-payment acceptance market are targeting merchants that are not “being served by mobile payments because the cost is too high,” Todd Ablowitz, president of Double Diamond Group LLC of Centennial, Colo., tells PaymentsSource. Sage made a smart move to avoid charging extra fees because merchants tend to look at what is included in the total cost such as monthly fees and transaction fees, Ablowitz adds.
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