Bank of America has recently entered the mobile payment space, competing with startup rivals such as Square and VeriFone with BofA’s Mobile Pay on Demand service. With so many options, including both startups and larger corporations, how can a small business owner choose the best mobile payment provider? NerdWallet is here to help with an overview of your options.
Overview of Mobile Payment Providers
|Company||Mastercard, Visa or Discover fee||American Express fee||Keyed-in transactions||Flat fee option?|
|Groupon||1.80% + $0.15||3.00% + $0.15||2.30% + $0.15||N/A|
|PayAnywhere||2.69%||2.69%||3.49% + $0.19||N/A|
|Intuit GoPayment||2.70%||2.70%||3.50%||If you opt to pay a $13/month flat fee, swipe fees are reduced to 1.70% on credit cards and 2.70% on keyed-in transactions|
|Bank of America Mobile Pay on Demand||2.70%||2.30% to 3.50%||3.50% + $0.15||N/A|
|VeriFone SAIL||2.70%||3.70%||3.70%||If you opt to pay a $10/month flat fee, swipe fees are reduced to 1.95% on credit cards and 2.95% on keyed-in transactions|
|Square||2.75%||2.75%||2.75%||Per swipe payments are completely waived if you pay a $275 flat monthly fee|
You should choose your mobile payment processor based on two primary characteristics of your business: how many payments you receive per month from customers and how much you receive per payment.
- If your business typically receives many payments that are small in size, use a mobile payment provider that does not charge per-transaction fees, such as Intuit, Square, Bank of America, PayAnywhere or VeriFone.
- If your business typically receives few payments that are small in size, choose a mobile payment provider that does not charge per-transaction fees, such as Intuit, Square or VeriFone.
- If your business typically accepts many payments that are large in size, look for an account with a lower percentage fee, even if it charges a per-transaction fee, such as Groupon, or a flat-fee payment system, such as Square or VeriFone. Square’s flat fee option is particularly good for businesses that process many payments.
- If your business typically accepts few payments that are large in size, opt for a payment provider that charges a low percentage fee, even if it charges a fee per transaction, such as Groupon.
- If your business processes more than $10,000 per month, then Square’s flat-fee option may be best for you.
In short, it’s worth doing the math to calculate which provider would benefit your company most, and to explore whether a flat-fee option is better for you if your business processes many transactions.