I've been running DYP for the best part of a year and half. In that time I've made my business grow to the point that I knew I needed to offer customers various payment options .

I'll freely admit that I am a technology geek and will gladly give anything shiny and new a go. So this blog post is about several options I've used and what I feel are the pros and cons of using mobile phone payment gateways.

Initially, at craft fairs, open days and larger events I'd just accepted cash and on the rare occasion toyed with paypal payments. However, there were times I lost a customer because I couldn't accept a debit or credit card.

Not long ago Paypal announced they were going to launch a payment system called Square and I was very excited because it seemed to make sense that you basically got paid straight to your pay pal account and  it worked with your iphone. Except the downside is that it wasn't available (and still isn't to this date) in the UK.

Then I looked at various card terminals, ones where you needed a merchant account or a terminal that you rented, then you had to include data allowances for a roaming sim, and then extra costs for till rolls and card charges and so on. I was actually left feeling quite jaded after this because for a small business, the cost of renting a machine just wasn't feasible for me.

Then last November I needed to find a way to take cards and so I started researching for alternatives again. If we have contactless payments where you don't input a pin or we can Ping money using a Barclays app via an iphone. (There are lots of other banks now letting you pay via their apps as well.)  Then there had to be an option to take cards.

So I found iZettle who had launched an app for the iphone (I believe it works on Android as well) which I downloaded and then set up my account details to authorise the phone and connect a bank account to my iZettle account. The set up for iZettle is very straightforward, you fill in a form, give your details and then they ask you to verify your account. A bit like setting up a paypal account.

iZettle works in two ways, one is with a card reader that can be plugged into your iphone headphone socket or phone charger socket, or the other option of just using the app only to manually input details. The great thing is you don't actually need the card reader to use the app, the trade off is you pay a higher rate of commission if you don't.

So I downloaded the app and used it at a Craft Fair in Headingley, where I could connect to the wifi. My first customer was great at being a guinea pig and very accommodating as we got used to using the app. They wanted to pay by Visa and this is where the process gets tricky. iZettle Visa transactions work best when the customer has an iphone and my customer didn't.

Basically, you as the merchant open the app, and then you're prompted to either insert the card reader or do a manual payment. We selected a manual Visa payment, and then you are asked to input the customer's mobile phone number. Now if you have a smart phone, this bit is easy because iZettle text you a link to a secure web page, where you input your card details and then they authorise the payment and send a message back to you to say the transaction was approved.

However, if you have a 'dumb phone' or an old non touch screen phone and you can't connect to the 3G mobile internet easily, then the other option is to let the merchant input their number, receive the text and you input their card details into your phone. Now I can hear you screaming 'NO!!!!' at the computer screen, and rightly so.

Who in their right mind would let a perfect stranger put their card details into another perfect stranger's phone? Well we did and it worked. Mostly because the customer knew where I was all day and had my home address and secondly, no data what so ever is ever ever ever stored in my phone or the little card reader.

So carrying on, once the payment is approved you get a giant tick from the app and the option to email a receipt to the customer with a photo of the items they've bought and off they go. The great thing about the app for iZettle is that you get a live update of what's available in your account, then 3 business days later they transfer the money to your nominated bank account and off you go again.

Now lets rewind a bit and look at the reader, which is a fantastic little box and my version fits in the headphone jack. You need a USB mini to USB wire to charge the device up but it uses so little power, once a month is fine though it does depends on usage. Now when you open the iZettle app and insert the card reader, it asks whether you're using the jack for headphones or reader, you select the reader and then it asks you to insert a card.

In this case, you'd enter a credit card (Amex and Mastercard!) and follow the same procedure of taking a photo, inputing the amount and seeking approval from the issuer. The customer is then prompted to sign the screen and then you email them a receipt and off they go. Usually, in my experience it takes less then 20 seconds to complete a credit card transaction and it really is painless and amazing! Overall, I find iZettle as an entry level mobile phone payment gateway easy and straightforward to use. Their website is clear and concise, I had a query which they answered with super fast speed when I emailed them.

Their transaction fees are 2.75% with a card reader and 0.10p + 3.50% without a reader. This latter option is quite pricey so you'd need to consider a charge or minimum payment to the customer. Overall, iZettle is perfect for people who will not be using a card reader too often but would like the flexibility of offering other payment methods

iZettle have also just announced a new chip and Pin box which is the same was the Worldpay box but is £45 + VAT (20%)

.readers izettle izetttle new reader

So now I bet you're wondering why I left iZettle for the World Pay device and the simple answer is: professionalism.

I love iZettle and I think it's brilliant but it is quite a convoluted process to get money and ultimately we're trying to give the customer the best possible experience so they come back again. I also don't want to flap about whilst it goes wrong and I don't want to cause my customer any embarrassment if the transaction times out due to poor 3G signal.

Over on the Craft Soup forum lots of people have discussed alternative methods of payment and Worldpay was mentioned. Now at the time I was (and still am) in the iZettle camp but I looked at Worldpay and found it was for Android only at the time. So I registered for an iphone update for when it was released and lo and behold it became available three weeks ago.

So I signed up, it's a fairly lengthy procedure and is more formal than iZettle, asking you questions about turn over, customer numbers, quite personal details about how you run your business. If you haven't thought about this before, then it's a good idea to consider what you want your business to achieve, look at your customer numbers and turn over.

The great thing with Worldpay, is that you can nominate a personal or business bank account to connect to. So no need for a separate merchant account or setting up a new business account. This was most important for me in terms of flexibility. You have the option to choose whether you're on Android or iPhone, this is important because the devices are different. I believe the device advertised on the website is the Android version because the iphone box is very different is the shape and style.

Once you've filled in the form, they ask you print out a direct debit mandate, which you sign and post. They then contact you to say whether you've been approved, as you and your business are credit checked. This took 3 business days for me, then the device arrived the following monday and I was able to use it last weekend at the Heart and Craft Fair. However, I'm rushing ahead of myself.

When you receive the device and unpack it, it's fairly straight forward to set up but it does require your full attention to get it right. You have to go to the website to get the right set up manual and connect the device to your phone via bluetooth. This took the longest for me as my bluetooth was being awkward, however we got there in the end! Then you download the app from Worldpay as this acts as your intermediary for conducting the transactions. Again the instructions guide you through the set up process and inputting the right information into your iphone. This is all very easy and fairly straight forward. Then once you've done that and the box is happy, you are ready to go!

Your first transaction: I tested out the Worldpay device using a Visa debit card over wifi first. The entire transaction works like this: You open the app in your phone, you select sale, then the blue tooth connects to the box to your phone and you are able to input the amount and description into the app. You hand the customer the box, they are prompted to insert their card, then a security check like normal occurs, the customer is told to input their pin and then an approval code appears on the screen of the box. Your phone app updates simultaneously to let you know the transaction was approved and whether your customer would like their receipt. You can choose between written, emailed or texted. You select which option and that is the transaction completed. The money arrives at your account and you're able to view it via the Worldpay website. It's all very straight forward and quick. I also tested with another bank card, over 3G how quickly it happens and it's roughly 20 seconds for approval. Quicker than a normal terminal but then you're not printing out receipts. For the funds were deposited in my bank account two days later and I was able to go on my merry way.

The transactions fees for the Worldpay terminal are: Handset: £59.99 (though I got mine with a pre registered deal for £29.99 inc. VAT) Transaction fees are: 2.75% for credit cards and 75p for debit cards. Now these are pricer than iZettle BUT you're getting a more professional system and money straight to your account. iZettle hold onto your money for three days before they transfer it. This is an important option to consider, if you need quick cashflow.

wp terminal WP pricing

Now I started this post over two weeks ago because I wanted to be totally thorough in my explanation and as to date Paypal and iZettle and several other companies have stepped forward with their new/updated mobile gateways. I love both of the gateways I've written about and I have a fondness for iZettle because they still produced a system that was almost snuffed out because Visa didn't want to play ball in Europe.

I think it's an exciting time for mobile payment systems and as we tend to rely more on our cards and mobiles, it makes financial sense to invest in one of the many systems available. I believe we're going to get a competition that tries to lure micro and small businesses to use their products, and rightly so. I just hope they realise though that high transaction rates and hidden costs will shatter a fledgling market and surely in this economic climate every type of customer transaction needs to be perfect for both parties involved.

Update: I realise that since writing this post I've talked about it from my perspective as an iphone user. I obviously can't talk for the Android folks but I think if you're considering moving into the mobile gateway group then your choice of phone determines your handset choice.

I would look at the best option you can afford for data connection and also whether your mobile phone provider is part of the 4G network. Currently most of us with smartphones use the 3G network and you'll know at times it can be painfully slow or super quick. 4G is the new mobile spectrum, so in theory it should be quicker and is essential for this mobile gateway payment to work. New iphone 5 and 5s (or whatever they'll call it!) are able to run on the 4G network PROVIDING your provider has access to it. So bear this in mind when making a choice.

90% of my transactions are successful over a 3G signal with the exception of large fairs where everyone is using their phones. Wifi is the best but if you're not particularly tech savvy it's not always easy to join a network.

If you're an avid mobile internet user like myself and you're definitely going along this route, then I really recommend you download and install Onavo. It is a data shrinker and is one of my constantly used apps, saving me a shed load of data and stopping me going over my limits. This is available for the iphone and the Android and has saved me nearly 1GB in data usage with my world pay app!

Right, enough from me now. If you have any questions drop me a line and I shall do my best to answer.

 

Bec

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