If you run your own business -- which is why you're reading this, right? -- then the question about whether you should open a business credit account has likely crossed your mind. After all, it's kinda embarrassing to tell your customers, "Oh, I'm sorry... cash only." Not only that, but it's slightly impractical: Who in 2011 doesn't take credit cards? Even the Amish use 'em.
That said, there are a couple of hurtles people see in ponying up with a service that can affordably, and easily support their payment processing needs.
For one, there aren't a lot of places people can turn to. One of the most popular services in America is Square, an app service that offers credit processing. But square has only been around since May 2010, and you might be one of the many who still foolishly believe you can't trust anyone with credit card information on the Internet. Those days are long over, and here's a fact you should consider: While you're making your customers wait for taking down all their vital info to make sure you get paid, your competitors are using Square's reader on their smartphones, swiping credit cards, and not making anyone wait. Plus, Square's rep is only getting better everyday: It was recently featured in Wired.
To get a better understanding of what's involved with signing up and whether it's feasible for small business folks in Chicago to do so, I called up Koru Street's founder, Amy Stretmater, who was an early adopter of the service for her business, which sells eco-friendly jewelry, bags, and paper goods at street festivals and stores.
To start off, can you give our readers a bit of background on your company and when you got started?
Amy Stretmater: I sell accessories made from recycled materials, and I do a lot of that at trade shows and street festivals, mobile events like that. That's why specifically I needed not just credit-card servicing but a mobile version. I've been using Square for just over a year, about 14 months.
When did you start to realize you needed a service like theirs?
Amy Stretmater: It was actually at an Apple store was how I heard about it. [Laughs.] I had been taking credit cards before that through a regular merchant and had to do the very old-school swiping of the credit cards on the carbon slips.
Like some cabbies use?
Amy Stretmater: Yup. And then going home at night and processing and hoping they were going to go through. I've been doing that for, gosh, about nine months before I started using Square and I always knew [the carbon slips were] a short-term solution and I was going to need to find something else eventually for all sorts of reasons. Security. People don't like the carbon copies that show their entire credit-card information on them versus the new receipts that just show the last four digits. People weren't comfortable with that. I wasn't comfortable with waiting until I got home, hoping that they were going to go through. And then also it took so much more time at the event when I could've been selling. People in line would've left because the four people in front of them would be taking so long to have them shell out all that information. I always knew I needed one, it was just waiting until the right thing was around.
What was the process like of getting set up? Is it idiot-proof, or is there a learning curve?
Amy Stretmater: That's the huge pro about it: It's really simple and that's their whole reason, was to make it simpler than it was and easier to understand the pricing. I already had a merchant account before that, but I didn't even know what I was paying because it was vastly different from credit card to credit card. It also can take months to set up a regular merchant account. With Square they just go through the process of verifying the bank account where the funds are going to go into. It literally takes a couple of minutes, then a few days to wait for them to do the back-end servicing, and then it's very, very easy and very clear-cut to use the bare bones end of it. And then you can spend a little more time of it for you personally to make it work for your business even better and faster for you.
It works with your iPhone or Android, right?
Amy Stretmater: It started with iPhone, then went to iPad, and now it's with Android. I started using it on the iPad because they didn't have the Android version out yet. Now I use it on both. I slip back and forth depending if whether I'm on a wireless location. I can also put in inventory on the iPad.
You've used it over a year now. How has the experience changed? Has it at all?
Amy Stretmater: Yes. It's definitely improved. A few tweaks here and there. They definitely take a lot of suggestions for things. For example I have products that are from four different vendors that I buy from. They added shelves. Before I had to scroll through all the product names, even though I knew it was stationary I was looking for. They added what they call shelves, and now I can just select "paper," and pick the item from within that. That's made it a lot faster. They do things like that here and there to make things easier and a little quicker.
Are there any disadvantages or drawbacks or frustrations you can see with it?
Amy Stretmater: One of the reasons they can keep their rates fairly low is when you first use it, you can receive $1,000. If you were to charge $2,000 worth of product on your Square reader, they would send you $1,000, and then 30 days later send you another $1,000. You can see it there in your account but it won't go to your bank account for another 30 days. You have to wait. That doesn't apply for me anymore now that I've had it for a long time and they have enough faith in my using it correctly. There's a downside if you have a really high price and you're going to put $10,000 in it for your first charge. You're going to wait for $9,000 of it. The majority of people are using Square on a smaller scale, so I think it's less of an issue. And as I said it changes as you use it more. [A rep from Square let Inc. Well know that deposits in full are made sooner, a change implemented after this interview took place. -- ed.]
The only thing that's been frustrating? You send receipts via text message or e-mail. Security-wise is I never see it, so they type in their e-mail address onto the phone or the iPad and a receipt gets sent off. When I log in and look at the recent transactions, it'll show me that this person bought $55 on this day and it'll have their e-mail address, but masked. It'll say, "email@example.com." So I know it did go to an e-mail address and can give them that, which is great, but if I refund the sale, it doesn't forward them another receipt, and I can't send them one because I don't have their e-mail address. But that's a little tiny thing. And you can't refund a partial amount. So if someone buys two bags and they want one, I can't refund them $50 of the $100. I have to give them all of the $100. The last time I talked to them they were considering adding some of those, but I don't know where that stands.
For people reading this who might be considering signing up, can you walk us through the process of what happens after you call them to enlist?
Amy Stretmater: You can do 100 percent of it online at their website. The only thing you can't do is use the reader. You have to wait for that to be shipped to you.
On the whole, though, you sound really positive about the service -- not that I want this to sound like a commercial for Square. But there really aren't a lot of alternatives out there for small businesses.
Amy Stretmater: Yes, absolutely. I've told so many people about it. Part of the reason I have told so many people is because I do trade shows and festivals and the vendor next to me will be like, "What is that?" I've been telling all my fellow vendors about it. Now I don't do it quite so much because it's very frequent that many of them have it. Also every once in a while a customer is buying from and they themselves have a business and they ask me questions about it. I've definitely passed it on to a lot of people and I haven't found any reason to not use it at all.