Given the number of announcements about mPOS solutions this year alone, you’d be forgiven for thinking that every market trader or corner shop owner is just a tap away from taking card payments on their phone. But the majority of some 4.8m small companies in the UK are yet to accept any kind of card payments, let alone mobile-enabled ones.
According to a survey by Intuit of 1,000 micro-businesses, which have fewer than 10 employees, only 19 per cent currently accept card payments. But, while merchants are still getting their act together, many consumers are increasingly cashless. A study of British shoppers by Santander UK and iZettle revealed that 39 per cent avoid businesses that don’t accept card payments or require a minimum payment amount. Independent retailers, pubs and bars, market stalls, taxis, along with food and drink stands at events were all identified as potential losers.
Here, we take a look at a range of newly launched and more established mPOS providers to reveal just how competitive the market now is. An industry-standard charge of 2.75 per cent per transaction seems to have been reached to make the offer simple for merchants. Free Apple and iOS app systems dominate, but what does this mean for emerging markets where smartphones haven’t taken hold?
Many of the solutions don’t have a large customer base, with some reluctant to reveal their figures. Plus, some of the mPOS supporters detailed below reveal a tech proxy war in the payments space between more familiar companies, and even between different innovation hubs around the world. But what if this doesn’t even take off? Will mPOS be superseded by contactless or peer-to-business payments before you can say swipe or sign?
Intuit launched in the UK in March and is the only one of our mobile payments systems currently operating in both the US and UK, as well as Canada. It offers swipe across the pond or Chip & PIN systems to UK traders, which connect via Bluetooth to an iOS or Android app. Established in 1983, giving it a fair head start, the company also offers a range of online book-keeping services to its clients. It was recently caught out lobbying the US government to the tune of $11.5m – more than Apple or Amazon – to ensure its tax solutions don’t get wiped out by free online accounting.
Cost of reader: £49 or free in US (was £99)
Cost of transactions: 2.75% on all transactions / 3.75% on manual / or a monthly plan of $13 a month (US-only) Supporters: Partners with Verizon in the US and now on sale in Staples online and in UK stores
Sweden’s iZettle got off to a bumpy start when it launched in November 2012. Although it had a sales partnership with EE in the UK, the free headphone jack-connected swipe device left users unable to accept Visa payments. Nonetheless, the company says it had 100,000 customers by the end of the year. The Chip & PIN reader, which works via Bluetooth and an Android or iOS app, launched in February. It currently operates in the UK, Spain, Germany, Sweden, Denmark, Norway, Finland and now Mexico.
Cost of reader: Was £49 now £99 plus VAT but offering £50 cashback to Santander Business Banking customers in Spain and the UK
Cost of transactions: 2.75% per transaction but if you’re not using the card reader, the fee is £0.10 + 3.5% per transaction
Supporters: Santander invested €5m in June this year
Judo launched in the UK in May and operates here on the USP that sellers and merchants do not need a smartphone or a card reader to make or accept a mobile payment. It has 2,000 small business customers at present and says it will go global if its clients require it. There are a range of transaction limits outlined by the company, but these can be waived under certain circumstances.
Cost of reader: No device but £50 to set up account
Cost of transactions: 2.9% + 29p Supporters: Privately-owned
Jusp (short for Just Pay) just received $6m (£3.9m) in Series A funding to develop its European Chip & PIN solution that connects via the headphone jack a la Square. The Italian company was founded by two 25-year-olds in November 2011 and is heading for a Q3 2013 launch. It offers the lowest transaction fee of any solution out there – but only just!
Cost of reader: €39 (£33)
Cost of transactions: 2.7% Supporters: Italian VCs
The UK’s Monitise launched its mPOS white-labelling service in Europe, Canada and parts of Asia in May this year. The company has a variety of live models that are chosen by its customers and the cost of each deployment depends on a variety of factors, not least of which is the size of market and type of solution. Monitise recently partnered with Blackberry to launch the BBM Money peer-to-peer payment service in Indonesia. O2 is currently offering a Monitise mPOS for £20 (plus VAT and 2.75 per cent per transaction) to Android and BlackBerry users.
Fees: Monitise does not set the transactional or devices fees – its customers build their own models
payleven is on offer in Brazil, a fast-growth smartphone market, along with the UK, Germany, the Netherlands, Italy and Poland. It would not disclose its usage figures, but went on sale in February 2013 with its Chip & PIN device that works via Bluetooth with an Android or iOS app. The German company launched in March last year and like Square in the US, has received the stamp of approval from Apple in the UK, where it is now on sale in retail stores.
Cost of reader: £99 (was £49)
Cost of transactions: 2.75% plus £20 credit for payments Supporters: Apple
Although it will not disclose any usage figures, PayPal is among the legacy figures in this line up, and has accumulated 110m active online payments accounts since it launched in 1998. The free swipe/manual/Chip & PIN headphone jack reader and app system, PayPal Here, is ‘on its way’ to the UK this summer. It is already in use in the US, Canada, Australia, Japan and Hong Kong. The company has been accused in recent times of being slow and bureaucratic but it does have the most visibility among consumers.
Cost of reader: Free reader
Cost of transactions: 2.75% when you swipe a card / 3.5% plus $0.15 per transaction when you type in a card number (3.6% in Japan plus 40 Yen, increasing to 5 per cent for use of Here)
Supporters: Owned by Ebay. And the ‘PayPal Mafia’…
Square was founded by Twitter’s Jack Dorsey in 2009 and was first-to-market with its headphone jack and app solution, which launched first in the US. It is now on offer in Canada and Japan but they haven’t (yet) reconfigured the payments platform for use in the EU. Square currently has 4m users and has a variety of loyalty offers, including the Square Wallet and gift cards. Square recently announced that it would not allow its product to be used by gun sellers. Which is nice. Both Square and PayPal are going head-to-head with operator NTT Docomo in Japan.
Cost of reader: Free swipe reader
Cost of transactions: Pay 2.75% per swipe for all major credit cards (3.25% in Japan) or a flat monthly $275 Supporters: Twitter, used in Starbucks and sold in Apple’s US stores
SumUp is currently on offer in the most countries around the world: the UK, Belgium, France, Portugal, Russia, Ireland, Germany, Austria, Italy, Spain and the Netherlands. It would not comment on usage figures but launched in August 2012, giving it a fair head start over other European providers. It is currently only a chip and signature solution that attaches to the headphone jack, but a PIN reader is on the way.
Cost of reader: Free
Cost of transactions: 2.75% Supporters: Klaus Hommels (early Skype, Facebook), Groupon and AmEx