In payment processing, acquiring new merchant accounts is time consuming and costly. And with churn rates running up to 22% every year, it’s a never-ending hassle. But there is one profitable vertical that acquirers have yet to tap: mobile merchants.
Who They Are
So where are these merchants? Mobile businesses are a hot market. Look outside the box, and you’ll find them everywhere:
- Food trucks are enjoying a surge in popularity. Much more than just a hot dog stand, today food trucks can offer really excellent meals, along with complex menus and premium prices. You’ll find them at festivals, along city streets, next to local breweries, and parked near tourist sites.
- Mobile fashion boutiques are cashing in on the trend toward customization and local shopping. These merchants offer a handpicked selection of clothing and accessories, curated for a particular demographic. They can set up shop at home parties, upscale festivals and outdoor markets.
- Mobile pet services are booming. Americans are placing increasing value on the wellbeing of their family pets, but have less time available for maintenance and appointments. From veterinarians to groomers, you’ll see kitted-out Sprinters trolling the streets of suburbia.
- But wait, there’s more...florists, booksellers, barbershops, recyclers, paper shredders, repair services. Truly, the list of mobile businesses is endless.
What’s the Catch
Historically, acquirers have dismissed mobile merchants as too small to bother with. For micro merchants just testing the waters, that’s probably true. If you’re running a handful of transactions per month and need simple business management tools, third party processors like Square are a fine option. But as businesses succeed and need to scale up, it’s time for a merchant account.
Winning on Price
As transaction volumes increase, differentiating interchange rates becomes a big consideration. Here’s where acquirers can offer a real pricing advantage. If you can show merchants how they’re leaving cash on the table by staying with all-in-one pricing, you’re likely to convert new customers.
Simplicity is Square’s calling card for success. Pricing is simple, business management tools are user friendly, and hardware is minimal. For new merchants, this value is almost as important as price.
But as businesses grow, this simplicity becomes a limiting factor. Successful merchants need business management tools and payment options tailored to their specific verticals. By moving to a standalone merchant account, businesses can choose the POS system that best supports their needs - and there are plenty to choose from. Some great choices for mobile merchants include Revel, TouchBistro and ShopKeep.
Keep an eye out for merchants with innovative mobile businesses. As these merchants succeed and look to expand, they’ll need your support. Mobile merchants can be a profitable market segment for payment service providers.