Mobile payment processor iZettle has today announced a new pricing scheme called Smart Rate. With Smart Rate the higher the amount of transactions that you process the lower the transaction fee that you will be charged. Rates start at 2.75% and drop down as low as 1.5%.
iZettle works by providing you with a card reader that plugs into your smartphone and then takes advantage of your phones 3G signal to perform the necessary actions to complete the payment. Users can send a confirmation email as a receipt once the payment has been taken. In addition there are some great reports that you can access that will help to keep your accountant happy.
As far as I am aware all of iZettle’s competitors charge the same 2.75% fee and so this initiative is likely to grab both headlines and new customers. The fees start to drop once you are selling over £2000 per month. If you are selling over £13000 per month then you will be charged the lowest rate of 1.5%.
One thing that I like about this scheme is the way that they have presented the information. On the iZettle website there is a handy slider that shows you not only the percentage that your transaction fees will be charged at but also the amount it will cost you based upon the value of your sales. Most business owners know how much they spend a month in transaction fees and to be able to compare and contrast so easily makes this a very compelling feature.
I know a number of businesses, particularly mobile businesses, who are already reaping the benefits of being able to take card payments when they are visiting their clients. We are living in an increasingly cashless society and if you use a mobile hairdresser or chiropodist knowing that you can pay by card means that you do not have to worry about having cash in the house when they visit. From the business owners perspective they do not have to bother about giving out change and perhaps more importantly they are not carrying large amounts of cash around with them all day long.
The scheme is currently only available in the UK but if it is successful then it will no doubt be rolled out to the other markets in which iZettle has a presence.