Debit card transaction volumes have increased because a combination of technology and innovative entrepreneurs. And that has helped push the cash cards into parts of the payments universe where they have never been before.
Now, a person can use their debit card to, for example, pay a professional like an accountant or therapist, pay a tradesman on site such as a plumber, contractor or tree removal firm, or buy fruit at a farmers market.
One leading firm exemplifying this new payments expansion is Square, a San Francisco-based company that has been revolutionizing the approach to payments with technology, design, customer service and pricing advances.
Founded only four years ago, Square has grown to now process more than $10 billion in payments per year for some 40,000 retail merchants across the country, up from only 200 in 2011.
Further, 7,000 Starbucks coffee shops have adopted it and if all of its transactions were at one retail store, the company would be the 20th largest retailer in the U.S, according to company spokesman Faryl Ury.
Ury said the company targeted small retailers, professionals and others which had never taken cards before as its first market, but soon found that other retailers were looking for a simpler, sleeker and more customer friendly way of processing payments.
“Square was a great solution for cash-only businesses that wanted to accept credit cards,” Ury wrote in an email response to questions. “However, we have seen tremendous Square adoption among larger brick-and-mortar businesses. Many of these businesses already had ways to accept credit cards – but still chose to switch to Square because (of what) we offer.”
The first benefit is a relatively low entry price. The company claims a business can get up and running with Square quickly, easily and cheaply compared to the previous requirements for setting up a point-of-sale system.
Companies that already take cards are attracted to Square because the hardware and software are free and the pricing is very simple. Square charges 2.75% per card swipe or $275 per month. “This monthly pricing can bring down fees to as low as1.3% per swipe,” Ury wrote.
Further, Square provides a wealth of transaction data at no charge to users. “Store owners might be wondering: Do we sell more candy or more chips? Do frozen food sales go up during dinner time or on the weekends?" Ury said.