Obama To Equip His Hordes With Mobile Credit Card Readers

This is actually quite a good idea and the GOP should take note:

President Barack Obama is no stranger to fundraising: his 2008 campaign drew a record-shattering $750 million in donations, and many expect his reelection efforts will result in a colossal war chest exceeding $1 billion come November. To aid in that lofty endeavor, Politico reports that campaign staffers with Android and iPhone handsets will soon be wielding Square credit card readers for collecting contributions on the go. Square units will allegedly be distributed to both Obama for America employees and volunteers nationwide, though a date for the rollout hasn't been pegged as of yet. While smaller political outfits have also turned to the plastic dongle for fundraising, Obama's White House will be the first to utilize the mobile payment technology in a presidential contest.

I've been using Square to handle mobile credit card transactions for about a year now and I absolutely love it. The service works with my Android phone and almost instantly authorizes credit transactions and puts the money in my account within a couple of days (less their fee). I'd be curious to know if any special fee discount arrangements have been made for the Obama campaign. They normally charge 2.75% for swiped cards, and 3.5% for manually keyed transactions. I would think any other discount arrangements might constitute a donation to the campaign.

With the Square readers campaign minions could walk around rallies and accept cards on the spot for campaign donations.  Square usually limits the number of devices on one account to 20, but they may be making an exception given the number of people involved in a campaign.  I just wonder how many people will open their credit card statements and find they've contributed more than they planned to a campaign, or perhaps made a contribution they didn't even know about.  The potential for fraud and abuse is pretty high in such an uncontrolled environment.

The other risk is that anyone can set up a Square account, so if they wish to pad their own coffers all they need do is sign onto their account rather than the official Obama campaign account.  Any transactions would flow to their bank instead of the campaign.  Maybe I should start attending Obama rallies to make a little extra cash?

The GOP should pay attention - using a mobile credit card device like Square is a good idea worth copying.  Get on it.

The Story of Square

A few weeks back I wrote a piece praising a new credit card processing outfit called Square which allows me...or anyone for that matter...to accept credit card payments without going through all the old hassle and expense of setting up a merchant account and buying expensive hardware and software.  It really is a thing of beauty and I've used mine several times to process product purchases for The Crimson River Quartet.

At Technology Review you can read the story of how Square was founded and how it's revolutionizing the credit card processing business.  I highly recommend the service for anyone who needs to accept credit card payments, especially if you don't operate out of a fixed location.  You do have to have an iPhone or Android phone with an earphone jack to use the service.  I use it on my Motorola Flipside and a friend uses it on his Verizon Droid.  Very handy.

Squared Away

I don't do many product endorsements on this site, but I'm really impressed with a new service I recently signed up for that will allow me to process credit card orders through my Android phone.  First, a little background:

Back in the late 90's I established a merchant account for the quartet with my credit union so we could accept credit card payments for products, tickets, etc.  Up to that point we were limited to cash or check, and with the rise of debit cards and the audience increasingly moving to plastic for purchases I needed to be able to handle those requests.  The merchant account fees were 3.25% + $.17 per transaction with a $20 monthly minimum.  I also had to buy a $600 software program to run the thing on my home computer.

At concerts we would run the person's card through one of those old zip-zap machines using hard copy receipts.  If the card didn't print legibly on the form, or somebody screwed up and put it in the machine the wrong way, I usually didn't find out about it until it was too late and that money was lost.  We also had no way to get approval on card transactions until they were entered into my computer.  I lost some money on bad cards along the way because of that.

When the quartet's schedule was greatly reduced it no longer made sense to pay $20 per month just to keep the merchant account so I dropped it.  When we had a big trip or other big event I worked out a deal to run credit cards through one of my member's business account.  That added other layers of effort to the process, and also caused some confusion with purchasers at times.

While flying home from Texas last week one of my guys spotted an ad in a photography magazine for SquareUp.com, a service that allows you to accept credit card payments via your iPhone or Android phone.  It has a simple little card reader that plugs into your phone's earphone jack and the software does the rest.  There's no monthly fee and the transaction fees are less than I was paying for my merchant account.

The sign-up process is very easy and within a few days you're ready to go.  Once transactions are processed the funds are electronically transferred to your bank account the next day.  It couldn't be easier.

The software also provides a way to process cards without swiping them in case you have some issues with the card swiper, though the discount fee is a little bit higher.

A couple of interesting features - the program allows you to put a note in the system about what the person bought, and if you want you can also take a photo of it which will be part of the receipt.  You can't print receipts on your phone, but the service allows you to email a receipt to the customer's email address.  It also uses your phone's GPS to record the location of the sale on the receipt.  Square will also allow you to create email receipts for cash transactions should you have need for that.  I don't believe there are any fees for that part of the service because no money flows through the system.

Another nice feature is that up to 10 devices can be signed on to the same account at the same time.  One of my other guys also has the service, so both of us can be signed onto the quartet account at the same time and that will make things much bigger at events where I can't be at the table all the time.

I've already used it for a couple of transactions and it works like a charm.  As long as you have a good phone and GPS signal it processes everything very quickly.  I'd recommend it for any business that moves around to different locations and doesn't just have one fixed location.  Check it out at Squareup.com.