The Other Guys in Mobile POS
Navigator Edition: Mobile Commerce & Alternative Payments: SPECIAL EDITION
By: Marc Abbey
Much has been written about Square’s mobile POS offering and Intuit’s Go Payment offering, and for good reason as these two pioneers continue to generate an impressive ramp in users and processed volume. However, the focus on these two organizations raises the question – where are other mainline acquirers on the mobile POS offering? In our most recent acquirer research, 69% of acquirers across the full range of non-banks and banks report offering a mobile POS solution. It is not a scarce product. These same acquirers, though, estimate a penetration rate of less than 5% of their merchant bases, a figure that contrasts with the hundreds of thousands of merchants that Intuit and Square cite when talking about their mobile POS user bases.
Thus far, Square and Intuit have provided free applications and a free card reader, but the acquirers in our research describe sign up fees that average nearly $60 and card reader pricing that ranges between $30 and $300.
Acquirers also utilized transaction fees averaging $0.20 – $0.22 and monthly fees that range from $5 to $20, pricing that, though there are parallels at Intuit and Square, is generally higher than at the two market leaders.
Intuit and Square appear to be positioning with simpler and more transparent pricing than other acquirers frequently use, but they also appear to be price competing in contrast to most other acquirers. Intuit and Square also tend to be innovating in terms of sales, boarding, risk and other business processes, perhaps giving Intuit and Square a cost structure targeted to the mobile POS niche, whereas there is much less evidence such innovation is occurring yet at other acquirers. There are many open economic questions regarding the mobile POS in its various use-cases, but the proliferation in the offering and the differences in approach between acquirers is already noteworthy.
For more information, please contact Marc Abbey, Partner specializing in Merchant Acquiring,firstname.lastname@example.org
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