Can you believe its been over a year since we last blogged about Mobile Point of Sale (“mPOS”), when we predicted the beginning of a price war ? Whats actually transpired has been more like a skirmish than a war with limited tactical price changes rather than wholesale price reductions. And, surprisingly, there has been even more new entrants and no casualties in this already saturated market . The new products are very “me too” with little in the way of new features, innovation or radical pricing. In the UK we are still waiting for someone to grab the market in the same way as Square did in the US in its early days.
Barclaycard “Anywhere” was showcased at Mobile World Congress in February but wasn’t launched until later in the summer. It takes a slightly different approach to the design of the device than most of the rest of the market with a physical lead to attach to your smartphone and it has a lid. “Why not bluetooth connection and why a lid“, I hear you say ? Good question. The device doesn’t accept AMEX and costs £72 (inc VAT) to buy with a 2.6% per transaction processing fee, so its at the more expensive end of the market. It does come with a reporting app which tracks sales, customers and stock.
In May, SumUp launched its proprietary mobile chip and pin device replacing its previous “dongle”. Hardly surprising given almost every other device in the UK market is now chip and pin and any device which isn’t chip and pin doesn’t last too long (mPowa, Judo Payments, etc). The device costs £79 (inc VAT to buy) and can accept Visa, Mastercard and AMEX. It still charges a fixed fee of 1.95% for all cards (including AMEX) keeping it competitive.
First Data also launched their “Pogo” card reader which is pretty much the same as most other card readers on the market. It accepts Visa and Mastercard (not Amex), costs £59.99 and charges a whopping 2.75% per transaction.
Yet to launch
In November, Optimal Payments plc announced its intention to partner with Handpoint to white label its mPOS device for Optimal Payment’s customers. The Handpoint device is already available to UK merchants for £99 (+ VAT) and 2.65% per transaction. And of course, there is the long awaited collaboration between Lloyds Cardnet and financial technology company Monetise plc. Their partnership to produce an mPOS device was announced in June 2013 but as yet there is still no product – maybe in 2015?
In the US, Amazon have entered the mPOS market with their “Amazon Local Register” product which initially undercut the transaction fees of Square and PayPal Here. Its a “dongle” rather than a chip and pin reader so probably wouldn’t do well in the UK market. However Paypal’s mPOS device was also a dongle in the US but they went on to launch the PayPal Here chip and pin device in the UK, so why wouldn’t Amazon?
Current market prices
There has been some limited price reductions, whilst WorldPay has actually increased pricing for its Zinc product with the removal of its unlimited transaction tier (for £12.99 pcm). This pricing tier enabled you to process £1,000 per month for an effective rate of 1.3%; by removing that tier WorldPay pushed the effective rate up to 2.55%.
Payleven have introduced 4 lower pricing tiers for merchants with monthly card turnover greater than £2,500 (reduces to 1.5% for greater than £7,500). Payatrader’s lowest rate (2.3%) can be obtained even for the smallest merchants through select distributors (such as Cardswitcher.co.uk).
Which product is best for your business? Most have very simlar if not the same features other than some don’t accept AMEX or CNP transactions and settlement time for you to get your cash varies, so do check if these matter to you. Because there are differing pricing structures, you do also need to check the pricing at your specific card turnover level. For example, iZettle and Payleven look cheap but only if your turnover is high enough to get their discounted pricing. We have done some detailed analysis for you because headline rates can be deceptive (click here). We have also partnered with the 6 cheapest options in the market and put together a comparison of their features and price (click here).