Accepting payment cards used to be a huge hurdle for small merchants.  Thanks to Square, a disruptive startup in the US, card acceptance is now both accessible and affordable for even the smallest merchants.  

Square offers a magnetic stripe reader that plugs into the earphone jack of a smart phone (see demo here).  It enables merchants to accept American Express, Discover, MasterCard, and Visa — all for 2.75% per swipe.  

A number of startups both in the US and abroad now offer similar and competing services to Square.  Intuit GoPayment, for instance, enables merchants to accept JCB in addition to the cards listed above and charges 2.7% per swipe (see demo here).  GoPayment also allows merchants to link payouts to a prepaid Visa debit card instead of a bank account.  

Unlike in the United States, payment cards in Europe are chip-based.  A startup in Sweden called iZettle offers an RFID reader that plugs into the dock connector of an iPad or iPhone (see demo here).  It enables merchants to accept payments for 2.75% plus 1.50 Swedish Krona (about USD $0.22) per transaction.  iZettle is only available in Sweden but will be launching throughout Europe in the months ahead.  

Rêv COIN has an eye on the emerging markets.  Like GoPayment and Square, it offers a magnetic strip reader that plugs into the earphone jack of a smart phone.  Rêv  COIN is currently in private Beta (applications available here).   

As these services become commonplace and transaction costs decrease, a new and lucrative class of merchants — Chris Anderson’s “long tail” — will begin moving from cash to payment cards.  And that’s just the beginning…   

Ben Lyon, VP of Business Development (@bmlyon)