Credit Card Merchant Accounts… A Thing Of The Past With Tech Like Bump and Square?
The traditional credit card merchant account as we know it is changing, in a big small way. The Square app is now available for the iPhone, iPad, and Android platforms and the company is looking to reinvent how small businesses accept payment for goods. By simply attaching a small credit card swipe that plugs into the headphone jack of the Android, iPhone, iPad, or iPod Touch a mobile merchant can swipe credit cards just about anywhere. Square then securely sends the information over the cellular network, the purchaser then "signs" the device with their finger to complete the transaction. Receipts are then sent to the customer via e-mail or SMS and funds are withdrawn like they would from any other credit card merchant account. Genius! Read on for the full story.
Square, Inc. has the potential to be a major disruptor to the established credit card system, which makes getting a merchant account for credit card processing quite difficult. Granted, Square takes a larger percentage than what a big retailer would pay with a merchant services account for each credit card swipe, but it is way easier to get started charging credit cards than a regular credit card merchant account. Square says it doesn't keep any of the customers' information and that it is compliant with all the relevant security regulations regarding mobile merchant services accounts.
Square wouldn't garner quite the attention it has if it weren't started by Jack Dorsey, who also co-founded Twitter. A trip to the Farmer's Market in Silicon Valley will turn up a fair percentage of vendors using this app to sell their wares. While some of the market regulars have full blown merchant accounts and a 3G connection for sales, more and more even these merchants are switching because the per month costs can be high on a mobile merchant account. 
Another alternative that a merchant recently offered to me was to "Bump" money via Pay Pal. If set up with the app, users simply "bump" there phones in to each other the GPS and Time of the bumps are used to match my account to the merchants and that signals for the exchange of money through Pay Pal. This is the most gimmicky way to move money, but to me seemed the least professional.