The Mobile Card Payments Revolution for Small Business

For many years taking card payments has been a big issue for many start-ups and small businesses. It often requires opening specialist merchant accounts, renting card machines and paying a range of fees on every transaction which vary according to which type of card a customer chooses to pay with. Often by the time all of these separate costs have been added up small businesses can be losing as much as 5% of each transaction. This is before you get into issues around chargeback’s and fraudulent transactions not to mention the need to be plugged into a phone line and power supply.

For a brand new start-up or growing business who may be making the odd sale at trade shows, events or markets, traditional card payments systems are not really a practical solution. With a growing percentage of all payments made using cards any business which does not have card processing capabilities will inevitably loose business. It was just such a situation which inspired Twitter founder Jack Dorsey to start his new company Square. Dorsey reportedly got the idea when speaking to a friend who runs a glassblowing business and who had just lost a sale worth thousands of dollars because he couldn’t take cards. His creation is small white square which plugs into an iphone, ipad or Android device. A card can be swiped through the top and the Square app on your phone or tablet allows you to enter in the amount or select the product. All of the transactions are then processed for a flat fee of 2.75% with no monthly or annual fees. As there is a single cost to pay for the card transactions it is much simpler and cheaper for start-ups and small businesses to use. Square has also started to attract attention from bigger companies and has recently been rolled out to 7,000 Starbucks coffee shops. Unfortunately there are no plans yet to launch Square in the UK.

Smartphone card processing

The iZettle app and plug-in

What are the alternatives to Square?

Whilst Square has not yet announced any plans to launch in the UK (the American’s don’t tend to use Chip & Pin, Square relies on card swipes). There are some more locally grown alternatives.

iZettle – One of the newest, and most Square like, options to launch in the UK. Like Square it relies on a small box which plugs into a Smartphone and charges a flat 2.75% processing fee. Originating in Sweden iZettle have been spreading through Europe for the last couple of months. In the UK it is backed by Mastercard, American Express and mobile phone company Everything Everywhere (EE).


Here – PayPal’s Here is another Smartphone plug-in (a triangle rather than a Square this time) and charges a flat fee of 2.7%. As you might expect it accepts the major credit and debit cards but also allowed customer to pay by PayPal or by invoice. The money is then deposited into the businesses PayPal account where funds can be seen and withdrawn on the same day (with Square it is the next day). For businesses who are already trading on eBay or using PayPal on their website using Here means all of their transactions can be handled through the same company.

mPowa – are yet another little box that plugs into a Smartphone. One of the things that has held back Square and Here is that they do not have Chip and Pin integration. This could potentially put any retailer using them at greater risk of being liable for fraudulent transaction. mPowa’s big selling point is that their solution does work with chip and pin enabling them to offer a secure transaction from customers and businesses. They are slightly more expensive than some of the other methods though, charging a 2.95% transaction fee.

Emu – Unlike the other options emu does not require a plug-in to your Smartphone or computer. Instead it works like a standard online shopping transaction. You simply type the card number, expiry date and other information into a web page and the transaction is processed. Maybe not quite as flashy a solution as some of the others but a very simple idea and one on which emu will currently charge you no set-up fees, no transaction fees and no other ongoing costs. It is, essentially, a free way to take money.

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