ART MARKET DEALERS COLLECTORS CREDIT CARDS
Identified by Forbes magazine as one of the technology companies people should know about in 2011, Square is a start-up established by Jim McKelvey and Twitter co-founder Jack Dorsey, and it seems set to transform the landscape of the payments industry.
Its flagship product, launched in October 2010, is a one-inch dongle that plugs into any device with a 3.5 mm headphone jack. Supported on all Apple iOs devices running 4.0 or higher, as well as all Google Android devices running 2.1 or higher, the dongle is a reader that enables virtually anyone to exchange money on the spot by way of a credit card.
Conventional credit card payment processing is not an option for many small businesses and enterprising individuals, owing to the prohibitive attendant fees, but Square promises to keep things simple for merchants. The Square app and reader are free, and there are just two charges: a flat fee of 2.75 percent for every swipe, and a fee of 3.5 percent plus USD0.15 for every manual transaction. Furthermore, no monthly minimum is required, so charges are incurred only when the product is used, which is a fairly quick process.
Doubtless the ease of use and the absence of out-of-pocket expenses have contributed to the popularity of the product, so much so that Verifone, which is the company behind an iPhone-exclusive service called PAYware Mobile, felt compelled to orchestrate a smear campaign against Square earlier this year, citing security concerns. As of June 2011, Entrepreneur.com reported that Square was handling over USD one million in transactions every day. In the same month, the company raised USD100 million in financing following its release of new services, which indicates great investor confidence in its potential.
Furthermore, Square periodically proffers testimonials from satisfied users via its Twitter account. Although it is not clear if such are solicited or otherwise, two are of particular interest, coming as they do from practising artists. Illustrator Sara Selepouchin says she “can’t imagine accepting credit cards any other way now“, while graphic designer Daniel Flynn says he would recommend Square to all his business-owning friends, adding that, compared to accepting payments by cheque, the “whole process is so streamlined and fast.”
If these statements are anything to go by, Square could be a significant resource for those working in the art market, especially for dealers participating in art fairs, where buyers are not likely to have sufficient cash on hand to purchase works. It should be borne in mind, however, that Square primarily targets small firms and sole proprietors, and thus bigger entities might not find the product as beneficial.
For instance, a calculator on FeeFighters.com, a site that allows users to compare various credit card processing services, shows that, with an average transaction size of USD100 and total monthly sales volume of USD10,000, a traditional merchant account can actually be cheaper than Square. Also helpful in this regard is an article from TopTenREVIEWS.com, which places Square side-by-side with nine of its competitors.
In a post in ArtFairInsiders.com, an online community for artists, photographer Leo Charette says, “The bottom line [in choosing a credit card processing service] is that much depends on your gross take for a month and your average transaction price. This gets further complicated when you consider the higher cost for reward or business cards.” Another photographer from the same site, Dave Hinde, suggests having a talk with one’s primary bank regarding its credit card processing services first, especially if you have a long history with that bank. “My bank waived most of the set-up fee and the monthly fee, when I told them I was looking at one of the online places,” he explains. “They are selling a service, and the published rate is sometimes negotiable.”
Moreover, it is worth noting is that Square, like its rivals, is generally limited to users and transactions based in the US, which means art collectors and dealers in Asia may have to wait for some time before undergoing what has been touted to be a revolutionary payment experience.
Square says on its website that it cannot “officially support banks, cards or merchants outside of the 50 United States and DC“, and though it can process internationally issued Visa, MasterCard, American Express, or Discover cards, it does not handle payment processing outside the US. There is, as yet, no definite timeline for international availability.
- Web 2.0 for art: 3 app and sites for art collectors – resource alert – May 2011 – useful tools for the web-savvy art collector
- Art education on the go: Point smartphone at sculpture for story – April 2011 – art lovers afforded a virtual pair of eyes
- Online VIP Art Fair disappoints: Is damage fatal? – February 2011 – the perils of technology exposed at the VIP Art Fair
- Open Exhibits targets museums with free software for online exhibition – resource alert – December 2010 – new software Open Exhibits transforms experience of exhibition planning and design
- 88-Mocca: how one collector is using technology to share his collection – April 2010 – Fritz Kaiser shares his art collection with the world
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