Imagine walking into a store, browsing and selecting an item, waiting in line a minute or two to check out, and then finding out that your purchase does not meet the minimum amount for using a credit card. You would not be happy. Would you ever shop there again?
Previously, the only way for a small business to accept credit cards was to open a merchant account and use Verifone systems. Since these systems are expensive and require card fees and transaction fees, the minimum purchase was born.
The $10 minimum purchase is dead. If you have items in your store that cost less than $10 and you have a minimum purchase requirement, you are missing out on revenue and losing potential customers. With the advent of Square and GoPayment, the days of cash only or minimum purchases are gone.
There is a helpful generalization for determining if you should utilize a Square or GoPayment system, or a merchant account or Verifone system. If your average credit card purchase is less than $50, use Square or GoPayment.
Here are some pros and cons for each new credit card system.
GoPayment has pay as you go at 2.7% for swipe rate, or $12.95 monthly fee and 1.7% swipe rate.
Pros – direct connection to QuickBooks, free app and reader
Cons – 2 – 3 days to receive funds, does not work with Amex (different rates will apply).
Square has two options, either $275 per month, or 2.75% per swipe.
Pros – free card reader and app, works with Amex, next day funds.
Cons – not connected to accounting software.
If you already have an older Verifone system, whose structure requires you to set a minimum purchase, consider adding Square or GoPayment to your payment options so you never have to turn away a customer. With new technology developing rapidly, the key for growth in your business is determining the best mix of solutions to address your business challenges and goals.