One of the most painful expenses for a new green business is paying for credit card processing. Current methods of offline credit card processing involve all types of expenses including paying for credit card processing machinery, paying a percentage of each transaction, and paying a flat monthly fee for each credit card company that a transaction is made through.
Credit card processing costs a lot of money up front, but since the percentage charged per transaction is usually pretty reasonable, most businesses that process a lot of transactions opt to accept credit cards from customers. However, a green business that does not yet have a lot of customers would be better off if there was an alternative to processing credit cards themselves – with the added benefit of reducing paper use.
Online Payment Processing
Payment processing on the internet is a different story for a green business, because they have the option of using fully online payment options such as PayPal and Google Checkout. These online payment processing services only charge a fee when transactions are made, making them a lucrative option for small online operations. The one down side to PayPal and Google Checkout is that they charge a high percentage rate per transaction, but because they are so convenient for both the merchant and the purchaser, even the biggest online stores usually offer at least PayPal or Google Checkout.
Offline Payment Processing
Until recently, if an online store wanted to offer their customers a credit based payment option, their only option was processing credit cards by themselves. But things are beginning to change, now that the online payment mega beasts, PayPal and Google, are crawling offline too. New businesses of the future may have a simpler option than credit card processing, through PayPal Wallet and Google Wallet. Although the concept is still in its initial testing stages, it is already possible for consumers to use their mobile phones as surrogate wallets. PayPal as well as Google are both willfully predicting that the mobile phone will replace wallets in the next few years.
In the following two videos you can see how PayPal and Google are envisioning the future of payment processing (both videos are almost exactly the same).
Google Mobile Wallet
PayPal Mobile Wallet
The Future of Offline Business
If payment options such as PayPal Wallet and Google Wallet become as popular as their respective corporations expect them to be, we might end up seeing as increase of offline businesses sprouting up. A new green business will be able to process transactions without the hassle of monthly credit card company fees, and will therefore have more money available to market and otherwise improve their businesses.
We might be on the verge of a major change in the way that business is conducted for small and large businesses, and the credit card companies will need to either adapt to the changes or leave their names to the history books. By the way, VISA has recently announced that it is working to produce their very own version of mobile purchase processing. It seems that there is no looking back now.
Guest post from Rachel Walker, a FastUpFront Blog contributor and business consultant. Fastupfront offers working capital to small businesses in need of loan financing. Green business concept image from BigStock.