The Pros and Cons of Mobile Payment Services

Apps for accepting customer credit cards on mobiledevices such as smartphones and tablets are becoming big business. Take for instance San Francisco-based mobile payments startup Square, which recently inked a deal with Starbucks to process all of the Seattle coffee giant's credit and debit transactions. And major companies such as PayPal and accounting software provider Intuit have created their own payment apps, too.

For small businesses, that means there are more options for simpler credit card processing or an inexpensive point-of-sale system. But from fee structures to device compatibility and support, there are some subtle and not-so-subtle differences between the mobile payment providers that business owners should know about before getting started.

Here's a look at pros and cons for four different mobile payment apps, and suggestions for who might want to consider using them:

Square

After launching in 2010, Square is one of the most popular mobile payments services, claiming to have more than 2 million users. Its card reader is a small, white square that plugs directly into smartphones and tablets.

Pros: The Square app has an easy-to-navigate design with big, clearly-labeled buttons. The iPad version -- Square Register -- enables users to add custom product photos, which can help simplify the check-out process for cashiers.

An online dashboard tracks detailed sales data and businesses can look at charts analyzing day-to-day, week-to-week or month-to-month performance. Businesses can create custom rewards programs for repeat customers, such as digital punchards. And the "Pay with Square" feature lets patrons open a virtual tab and pay via their smartphones without having to swipe a credit card.

Cons: Other than an online Help Center Square offers little in the way of human tech support. That can make setting up custom features, such as sales tax rates, difficult for non tech-savvy users.

Price: Square has a 2.75 percent swipe fee, plus an additional 3.5 percent and a 15-cent transaction fee for card numbers that are keyed in manually.

Who should use it: Business owners who are just getting started and want a moderately easy-to-use mobile payments service should consider going with Square, despite its lack of hands-on tech support.

Intuit GoPayment

Mountain View, Calif.-based Intuit offers Intuit GoPayment, which is built specifically to work with its QuickBooks accounting software.

Pros: GoPayment transactions sync directly with QuickBooks PC and its web-based counterpart, QuickBooks Online. For Intuit Merchant Service users, it works with QuickBooks for Mac as well. Being able to flow transactions directly into your accounting software can save time that would otherwise be spent manually moving that data.

Other perks include the ability to add up to 50 users per account and having automatic, location-based sales tax calculation for transactions.

Cons: First, the physical reader is bulky -- about three times larger than Square's. Additionally, Intuit GoPayment doesn't make it easy to key in cash payments, so you'll have find another way to process those transactions and upload them to QuickBooks.

Price: For $12.95 per month, you can cut the basic transaction fee Intuit takes per transaction from 2.7 percent to 1.7 percent (and from 3.7 percent to 2.7 percent for keyed rates). There are no transaction fees.

Who should use it: For dedicated QuickBooks users, Intuit GoPayment offers significant convenience. But brick-and-mortar businesses that take cash as often as cards might want to think twice.

PayAnywhere

By Troy, Mich.-based merchant services and credit card processing company North American Bancard, PayAnywhere has been in business since 1992 -- longer than any of the other services.

Pros: PayAnywhere offers over-the-phone support, with separate phone lines for tech support and customer service. There is a live chat option on thePayAnywhere website, plus comprehensive video tutorials demonstrating the app's features. PayAnywhere also is one of the few mobile payment apps to actively support BlackBerry devices.

Cons: It works with any Apple AirPrint compatible device or Star thermal printer, which can be used to connect receipt printers and cash drawers to your device. But this only works for Apple devices, so you're limited to using an iPhone or iPad.

Price: PayAnywhere charges 2.69 percent per swipe, with 3.49 percent plus a 19-cent transaction fee for keyed transactions.

Who should use it: For business owners who'd rather entrust their payment processing to a company that's been doing it for more than just a few years, PayAnywhere might be the best option. And its 24/7 support can help mitigate any technical concerns.

PayPal Here

Launched in March, this service connects with a user's PayPal account and lets users process payments and track everything that happens for both online and offline sales.

Pros: PayPal Here accepts the widest range of payments, including online invoices and payments through PayPal's mobile app. Using a smartphone or tablet camera, it can also accept checks and take credit card payments without using the detachable card reader.

And instead of having to wait one or more days for processing, funds are immediately available if spent with a PayPal Debit card.

Cons: There is no dedicated app for the iPad or other tablets.

Price: PayPal charges 2.7 percent per card swipe and 3.5 percent plus 15 cents for keyed transactions.

Who should use it: PayPal users will most likely start with this service. So should businesses that do significant amounts of face-to-face and online sales.