The largest processor of mobile credit card payments recently reported that in just the last month it has seen its annualized expectations for transaction values surge by 25 percent.
Square, the mobile payment processing startup created by Twitter co-founder Jack Dorsey, recently revealed that it saw projected transaction values for 2012 climb to more than $5 billion in March, up from February’s expected total of more than $4 billion, according to a report from Bloomberg News. The company believes this huge uptick in transactions is because of the large number of small businesses flocking to the service to take advantage of its fast turnarounds on making funds available.
While most payment processors can take up to five business days after a purchase to get the money in the hands of a company, Square takes just one, as long as the payment is processed prior to 5 p.m., the report said. This is crucial particularly to small businesses, which often need funds on a day-to-day basis just to keep operations going.
“Sole proprietors and small businesses live and die by their cash flow,” Keith Rabois, Square’s chief operating officer, told the news agency. “They don’t have access to capital; banks don’t give them loans. They need to take the money they make today and use it to pay bills, buy things and pay employees the next day, so having access to funds is super-crucial for them.”
Square saw the uptick in use of its payment processing devices despite heavier competition in its industry from a new offering by eBay’s PayPal business: the Here mobile card reader, the report said. The latter company expects businesses to adopt its offering so rapidly that it projects it will process about $7 billion in payments at an annualized rate by the end of the year—a 75 percent increase. The mobile payment processing industry as a whole is expected to process as much as $170 billion annually by 2015, up from just $60 billion in 2011.
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Mobile payment processing is seen by some as the technology that will bridge the gap between traditional credit card payments and the type of mobile wallet payments many experts project will become ubiquitous within the next few years. Many polls have shown consumers are wary to adopt the more advanced technology due to fears over its security.
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