R&B vocalist Kira Small and her husband, bassist Bryan Beller, was in our area this summer to perform at a house concert that I was hosting. After the concert, Kira was selling CDs at the merch table. She was taking credit card purchases with this tiny white box that plugs into to her iPhone.
She told me about Square, and I decided I would test it out and see how it worked for my teaching studio. At this point all my credit card transactions were happening through PayPal, so it seemed wise to develop some alternatives.
Square has been fantastic so far, a huge step up from Paypal in many respects. The transaction fees are lower (we will look at data shortly), I have the ability to take payments anywhere quickly, I can provide receipts on the spot, and all the money is automatically deposited overnight in my bank account.
So here’s a great example of Square in action. I played a concert Sunday. Afterwards, I went to dinner with one of my adult guitar students. During dinner, she realized she hadn’t made a payment towards her tuition this month. She asked to use Square to make a payment. She handed me her credit card, I plugged the card reader into my phone and swiped her card. She signed for the transaction on the touch screen of my Droid, and then I emailed her a receipt. (You can also text a receipt.)
So she made a $94 payment on Sunday towards her tuition. I’m going to use that as a baseline to generate data. Normally, I would I pay $3.03 to Paypal in transaction fees on that. Through Square, only $2.59 was deducted. .44 cents difference. If we take that number as a sample across 65 students per month, that’s $28.60 in my favor. Over a year, that’s $343.20 more.
With Paypal, I have to wait 3 to 4 days for the money to transfer to my bank account or use my Paypal credit/debit card. Now, all of the money processed by Square is deposited automatically overnight into my bank account. Instant. Cheaper. Faster.
I’m going to keep accepting Paypal payments, but I am definitely now a fan of Square. I plan on encouraging my students and their families to switch to paying via Square in 2012.