Square vs The Merchant Doctor’s Phone Swipe Part 1
POSTED BY: Rhett Baylies
Square vs The Merchant Doctor solution, The Phone Swipe!
While the battle goes on about which mobile processing solution to accept credit cards on the go is best, who is the winner?
In the past we have written articles outlining the big differences between using Square to accept credit cards and The Merchant Doctor’s PhoneSwipe mobile payment solution but with competition heating up and changes being made continuously it is time for an up to date honest comparison of the two products.
Let’s start out by looking at the similarities between the two mobile payment providers.
Both Square and Phone Swipe offer small volume merchants a simple and efficient way to accept credit cards just about anywhere with NO contract, NO monthly fees, NO annual fees, NO PCI fees along with easy to understand credit card processing rates and both mobile payment providers supply FREE card readers. Both have a fully customizable free app that allows merchants to create virtual point of sale systems. Square and Phone Swipe can be integrated with cash drawers and printers. As a matter of fact Square and the Merchant Doctor solutions are just about head to head when it comes to the functionality of the app itself. So how do you decide which company is the best for your business to accept credit cards with? In Part One of our series we would like to start with some of the technical differences between Square and Phone Swipe and then in Part Two move onto service and functional differences.
First Off, Square is NOT a credit card processor!
This is one myth that Square would love for you to continue to believe. Many businesses seem to believe that they have somehow found a way to “cut out the middleman”, however, Square Up is not a credit card processor they are basically a merchant service provider with one major difference. Square is what’s called an aggregator (more on that in a bit). So, just like a lot of merchant service providers, Square is simply a representative or link for the processing bank. Chase Paymentech is the company that actually processes the transactions for Square, and JP Morgan Chase is the company’s acquiring bank (also known as a member bank). Just like many merchant service providers Square is responsible for customer service, sales, billing, and a host of other activities but Paymentech is responsible for the transactions.
When a transaction is conducted, the Square application gathers credit card information and routes it to Paymentech whom routes it through the appropriate Visa or MasterCard networks to the customer’s card issuing bank. When an approval code is issued Paymentech routes the funding from JP Morgan Chase.
So the truth is that Square is simply a merchant service provider and uses processors and banks to complete credit card transactions. This means that they are not immune to Interchange rates and fees or any Visa MasterCard assessments etcetera.
There is one big difference when you have an account with Square vs Phone Swipe at the Merchant Doctor.
As I mentioned, Square is an aggregator. This means that when you have any account with Square they are simply providing your business access to a large aggregate account that is in Square’s name and not the yours! This means technically your hard earned sales are actually the property of Square and not your business until Square distributes the funds! The problem with this goes beyond the security concerns but with the fact that this practice gives Square the right (like Pay Pal) to do with your funds whatever they like, for instance, freezing your funds for any reason they see necessary. Since Square is not a credit card processor and they are getting the aggregate account from a credit card processor that means that the true credit card processor (Paymentech) also has the right to create a reserve account if there are fraud concerns. With the Merchant Doctor and Phone Swipe you will be assigned a custom and unique merchant account in your (or your business’ name). This account provided guaranteed deposits regardless of your sales volume. Your unique merchant account with the Merchant Doctor will no co-mingle your funds with any other business which means more security and control for you. It also means that you have a processor working on for your best interest and not their own.
Now let’s compare Square with Phone Swipe by looking at customer reviews.
There is a clear winner when you look at customer ratings on ITunes. The Phone Swipe gets a full 4 stars while the Square review only gets 3 stars. In reading the written reviews regarding Square there are three distinct issues that cause their low star rating; Funds being held, lack of customer service, and poor, broken, or never received card readers. Using the same process and looking at the Phone Swipe reviews a majority of the complaints were regarding the sales office or agent representing Phone Swipe and poor service or misrepresentation provided by that particular sales office. Remember, like Square, who is a representative for Chase Paymentec, Phone Swipe is actually a North American Bancard product and can be sold by any number of independent representatives who may or may not have the years of experience and customer service standards that the Merchant Doctor team is able to offer.
Next let’s compare the Square Card Reader vs the Phone Swipe Card reader.
Once again sourcing customer reviews from ITunes and the the Google Play store it is readily apparent that the Square card reader is highly unreliable and cheaply made. Many Square reviewers wrote that they love the idea, the pricing, and functionality of the app but find it useless do to the poor card readers and lack of customer service when one breaks. Compare that to the Phone Swipe card reader which is made by ROAM DATA who is the #1 manufacturer of secure mobile payment card readers in the world and is incredibly well built, reliable, and know as an industry leader. The number one “problem” experienced by the reviews this author read of the Phone Swipe are claims that it does not work or function as a card reader. This is often a simply fix and all users have to remember is to make sure that the Media Volume on their device is turned up all the way to ensure that the card is read properly.
It is notable to report that after huge amounts of pressure from the industry, concerned users, and even the government Square finally released an encrypted card reader. It still dumbfounds many as to how such a well funded company ever thought that it could issue such corruptible devices to just about anyone who asked for one. We do thank them for finally providing a more secure card reader to its users.
Square Customer Service vs Phone Swipe Service with the Merchant Doctor.
One of the biggest complaints from Square users is their lack of customer service. Square only offers service in one of three ways - the online FAQ/Help page on their website, via Twitter, and EMail. Square does not provide any customer service center with real people that can interpret and assist with customer issues. Compare this with a Phone Swipe account with the Merchant Doctor who also offers service via their FAQ/Training page and email but also provides a 24/7 customer service center based in the United States that merchants are able to easily call into for immediate assistance, a full video based training center, and merchant portal assistance. Additionally Phone Swipe users who have accounts with the Merchant Doctor will appreciate that they are able to directly reach the Merchant Doctor team via email or direct phone line to answer questions and concerns.
Square Account Limitations vs the Phone Swipe.
Another big difference between these two mobile payment providers are the limitations set on the amounts that can be processed either per transaction or on a monthly basis. All merchant accounts are created with some type of limitation based on the businesses’ needs to help protect against credit card fraud. With the Phone Swipe your account is fully customized to meet the needs of your business and is easily modified to grow or change with your business. This differs from Square who treats all businesses the exact same and places a $2002/month manual transaction limitation on all accounts. If your business processes over that amount Square holds your money for 30 days by contract. You may request to have that amount increased, however, there are a number of reports that this process is difficult, inefficient, or impossible. Funds are deposited by both companies in 2 business days. Square does claim on their website that funds are deposited within 24 hours, however, if you look at the fine print the funds are released for deposit in 24 hours. Once funds are released it could take an additional 24-48 hours for those funds to be deposited into your account depending on your bank. So when it comes to deposit times both providers are equal with a reliable 2 (or 3 depending on your bank) business day deposit times.
Now that we have looked at a comparison of the operational differences between Square and a Phone Swipe account with the Merchant Doctor stay tuned because next time we will look at what each company has to offer that the other does not so that you can make the absolute best choice for your business’ needs.