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Business in Vancouver

Canadian Freelance Union- CEP

Kudos offers small businesses a new mobile payment option

by  Alan Zisman (c) 2012 First published in Business in Vancouver January 24-30, 2012; issue 1161 High Tech Office column

As close as we might seem to being a cashless society, many smaller businesses have been left on the sidelines, either because they haven’t generated enough sales to make it worthwhile to set up an account to process credit and debit cards or because their business is on the street or on the go, making it difficult to validate cards.

Dan McCann, president of Regina-based NetSecure Technologies, said everyone in Canada, from taxi drivers and electricians to craft merchants and caterers, is looking to accept payments using mobile devices.

Last year, Square, an iPhone and Android app, allowed many of those “micro-merchants” to accept plastic. The app is paired with a small, square device that plugs into the smartphone headphone jack and allows registered users to swipe credit cards to accept payments. Square, however, isn’t available in Canada.

Last fall, NetSecure premiered a similar service, Kudos, for both Canadian and U.S. customers (www.kudospayments.ca). Like Square, it consists of an app and card-swipe device. Unlike Square, Kudos offers a BlackBerry app along with apps for Apple and Android smartphones and tablets.

And while Square’s card-swipe gadget is free (to registered accounts), Kudos charges $99 for the company’s somewhat larger device. (You can use the app to accept payments without the card swipe device as long as you’re prepared to manually enter card information.)

The company also offers a USB-based device that can be used with Windows desktop or laptop computers. (Mac support is promised.) Both desktop and mobile devices can be used with a single account.

Linda Read is a silversmith (and – full disclosure – my wife: www.lindareadjewelry.ca) who participates in the popular Eastside Culture Crawl every November.

Each year, customers have been disappointed that she was unable to accept credit cards, but with the bulk of her sales happening over the three days of the Crawl, the monthly fees charged by traditional credit card services made that impractical.

This year, she set up a Kudos account, submitting a four-page application a week prior to the event. The result: this year, she was able to accept payments on an iPad at her studio from customers with Visa, MasterCard, Discover and American Express cards. (No Interac debit, but Kudos hopes this is coming.)

The service is available anywhere there’s an Internet connection, whether WiFi or mobile data. Using the online connection, credit cards are validated immediately and receipts are optionally emailed to customers or printed (assuming availability of a wireless printer). Kudos promises that transaction information is encrypted and secure from the moment a card is swiped.

If no Internet connection is available, credit cards can still be accepted; in that case, the app stores transactions until it can go online, though Kudos notes that in that case, it is unable to validate cards at the time of sale.

Because the bulk of Read’s annual sales are made during the month before Christmas, she’s pleased that there are no monthly fees. Kudos charges 2.9% plus $0.20 per transaction. Payment was received at her bank within two business days.

Read found the Kudos app straightforward and easy to use. Customers were surprised that she could accept cards and found the process of signing with their finger on her tablet screen amusing.

Kudos is not alone in offering mobile payment services to Canadian micro-merchants. Payfirma (www.payfirma.com) offers a similar combination of account, app and card swipe device.

Well-known financial software developer Intuit (makers of Quicken, QuickBooks and TurboTax) is planning a Canadian launch of its (currently U.S.-only) iPhone/iPad-only GoPayment service.

As a result, 2012 will allow Canadian small businesses a variety of ways to use mobile devices to accept payments. Said Kudos’ McCann, “Small businesses that were once unable to provide a credit card option now have a quick and affordable way to meet customer needs.”