Square Up - PayPal Here - Intuit Go Payment vs FirstData Mobile Pay

By Santa Barbara Merchant Services on Jan 15, 2014 at 08:11 PM in Santa Barbara Contractors Association

Square, PayPal Here, and Intuit Go Payments

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We find a lot of contractors in our area either not accepting credit cards at all or processing using “Square”, "PayPal Here", or even "Intuit Go Payments". – It's a great sales tool guys!

Square Up - PayPal Here - Intuit Go Payment vs FirstData Mobile Pay
First Data Mobile Pay Swiper

Some may believe that these providers are easy to set-up, pain free or the only tool on the market that can authorize credit cards using their smart phone. However, when reading through the fine lines of the program, it is clear that these products are generally only an ideal fit for a very small subset of the credit card acceptance market (those planning to process less than 1000 per year in volume).

One of the things going for these providers is that it has a fixed rate, which makes it very easy to calculate what a merchant pays for their credit card acceptance, but unfortunately for the merchant, that rate is very very high. Additionally, these programs are easy to sign up for which is convenient but can also be expensive. Santa Barbara Contractor Association members currently using this program, or considering using the program, should make sure they fully understand the positives and negatives of the program when compared to the other options that are available to them through Santa Barbara Merchant Services.

• Positives: Fixed credit card rates make it easy to calculate fees; no monthly fees.

• Negatives: Extremely high rates; if Square customer has over $1000 in sales in a week, Square will hold any money over $1000 and not deposit it into their customer’s account for 30 days; not PCI compliant which means significant exposure to risk and chargebacks.

Square, PayPal Here and Others utilize a fixed pricing program - any merchant on a fixed pricing plan is simply paying too much for credit and debit card acceptance. For example, Square charges 2.75% when a card is physically swiped and 3.50% and $0.15/authorization when a card is not present.

So on an average $10,000 transaction where the card is present, the merchant is paying $275; where the card is
not present that fee comes out $350.15. In both cases, $9000 is held in “escrow” for 30 days. SBCA members already
processing with us know that the rate on the First Data Mobile Pay Solution is far far less, and the savings can total hundreds of dollars per transaction.

Square does not charge a monthly fee or a setup charge because they are making significant money each time a merchant utilizes their program. They also partner with big merchants like Starbucks to get the word out – but, keep in mind, they are not giving Starbucks the same rates they give everyone else.  They have put Starbucks on the same plan we advocate for all SBCA members, interchange plus. Interchange plus is the term used to describe the wholesale rates charged by the credit card associations (Visa®, MasterCard® and Discover®). With over 150 credit cards in the market today, each of them correlates to a slightly different interchange rate.

As the name implies, interchange plus pricing works by applying a fixed markup fee to the wholesale interchange rates from Visa, MasterCard or Discover cards. This includes two basic fees: one is often expressed in basis points (i.e. bps) and the other is an authorization fee (i.e. every time a business authorizes
a credit card).


Getting a credit card swiper for a smart phone is available from most every credit card processor - Understand that Square, PayPal Here, and Intuit Mobile Pay is not the only game in town when it comes to this service.  In fact the Santa Barbara Contractors Association themselves process credit cards through First Data Mobile Pay Solution instead. 

PCI Compliance is key to lowering your exposure to risk. All businesses (Big or Small) that process credit cards are required to comply with PCI compliance and the potential penalties for non compliance are stiff.

The only reason for a business to go with Square, PayPal Here, or Intuit Mobile Pay is if they are doing so little volume (Less than 1000 per month) that the monthly fees associated with cost plus are just not worth it - with that said, best to do the math with April at the Santa Barbara Contractors Association or your Santa Barbara Merchant Services representative because chances are the fees charged on just a few transactions per year make up for the 15 minutes of paperwork we need to do together.

Santa Barbara Merchant Services Inc
805-259-3211 x 101

  • First Data Mobile Pay Sales Sheet – First-Data-Mobile-Pay.pdf
  • Oct 09, 2014 Arrow1 Down Reply

    Hello - No one seems to answer your phone. I left a VM . thanks