It’s the weekend. You’re at an outdoor fair, yukking it up with pals, eating bad food and eyeballing that handmade shawl made out of alpaca-fertilized lawn clippings (the alpacas are local). But it’s $89, and you don’t have that much handy.
“That’s okay,” the vendor says, handing you an iPhone with a square, plastic dongle sticking out of it. “I accept credit cards.” Do you: a) swipe away and peacock-strut your purchase in the direction the artisanal patchouli stand, or b) run away and flag down a cop?
The answer may depend on how many trips around the sun you’ve taken. “Some older people are leery of running their card through a pink or turquoise phone,” said Vanessa Fasanella, a New Haven-based knitter, who sells her creations on weekends under the banner Loopy Yarn Crafts. “Especially people who are over 50... Older people don’t want to do this.”
Fasanella, whose business partner is Alison Geisler (an associate editor for this publication), doesn’t even own a mobile phone. At craft fairs, she handles cash transactions, while Geisler soothes wary credit card holders, eventually running their plastic through a reader manufactured by Square — one of two companies leading the portable-swipe frenzy — attached to her iPhone. (The other company is Intuit, who makes the GoPayment card reader.) Fasanella estimates they’ve used the Square less than a dozen times in the last eight months, but she’s convinced it’s good for business.
“When we are at a fair, most of the business is cash,” Fasanella said. “At the last one, we took in almost $500, and we swiped less than $100. But the idea is enticing to people because they don’t have to worry about using all of their cash. It’s great for spur-of-the-moment buying. It’s a huge deal.”
The idea has caught on big-time with Connecticut food trucks. Fryborg (fryborg.com), a New Haven purveyor of fried taters and sandwiches, has been using the Square since they opened at the end of August last year. “I was looking for an easy and inexpensive way to scan credit cards and a way of keeping track of sales,” said owner Jonathan Gibbons. Fryborg, like Loopy Yarn, is mainly a cash business; most people assume they don’t even take cards. “In terms of the transactions that I do process, I’d say it’s about 75-80 percent cash,” Gibbons said, of which Square takes their standard 2.75 percent. Some younger tech-savvy folks have a Square Wallet account, which lets you buy stuff without taking out that leather thing in your pants; the balance goes right into Gibbons’ bank account. “The next day I get my money, unless it’s a weekend, and then I’ll get it on Monday,” he said.
Madison’s High Tide Gourmet (hightidegourmet.com), a new-ish seafood truck owned by Richard Messier, saw the writing on the wall: swipe or perish. When patrons said they were heading to the nearest ATM to get cash, Messier knew they weren’t coming back. “My business isn’t even one year old,” Messier said, “but kids on the shoreline do not carry money. If I’m going to work in Madison, I have to have [a card reader].” He also observes wary parents giving their kids debit cards, allowing for easy online tracking, rather than cold, crisp bills. “They don’t know if kids are spending it on booze or whatever. Now they give the kids a debit card and they know exactly where the money goes.”
Are there any disadvantages? “As of right now, I have no downside,” Messier said. “There was another guy who was trying to convince me to buy something else. He’s been telling me all the disadvantages: ‘If you read the fine print, they can start sitting on your money,’ and so on. But I’m not a restaurant, I’m a food truck. I’m not doing that much money on the Square reader. But in Madison, I have to have it.”
Brick-and-mortar stores, not surprisingly, have been slower to adopt the new technology. Rich Martin owns The Telegraph and Telegraph Recording Company in New London with his wife, singer-songwriter Daphne Lee Martin. The Martins use Square to sell merch at shows. “I got the Square reader when it first came out,” Martin said. “I think you are seeing it more and more. It’s become a standard of the industry... If somebody’s at the bar and has $20 bucks in their pocket, they want to buy beer, but they also want to pick up the band’s CDs. It really makes it easier for bands.” It also gets used at the record store. “It’s turned into a good backup for us if our network is having issues. You don’t want to lose a customer.”
But Martin said he’s not about to shed the traditional credit card system anytime soon, mostly to avoid potential headaches. Even if they end up paying more in fees, there’s a sense of safety that comes with the hard lines and clunky PIN keypad. “I haven’t done the math,” Martin said. “I’m locked in for now because changing it seems like a nightmare to me... I could probably switch to the Square exclusively at every time, but I’d probably get hit with some fees.” His old-school credit card vendor, to their credit, offers excellent customer service, checking in frequently to see how things are going at Telegraph. “I could use some lower rates,” Martin responds.
Relic Brewing Co.’s Mark Sigman uses the Intuit GoPayment reader. “I think it’s really good,” he said. “It integrates better with other back-end accounting stuff.” (Intuit’s main gig is their QuickBooks software and related spin-off applications.) When he hatched his business 16 months ago, it was the only reader available to Android users. (That’s no longer the case.) Sigman, who brews and operates his tasting room in Plainville, is constantly on the road, visiting package stores and running tastings at festivals. Anywhere between 25 to 50 percent of his customers pay through the swiper. “And everyone under the age 25,” he said. “I’ve been using it for more than a year, and nobody has a problem with it. Sometimes they have trouble signing [the screen], but it’s almost universally a positive thing... If somebody wants to buy a T-shirt, they can do it. I can’t imagine why everyone doesn’t use it.”
Telegraph’s Martin acknowledges that portable card readers, even for walk-in businesses, are probably the way things are heading. “[With the traditional system] there’s different fees and percentages, and it’s very confusing,” Martin said. “It’s intentionally so, I think. We’d probably get along better without it and just use the swiper.”
For now, he’s happy keeping the Square on the road and as a backup. “I just did a record fair in Providence,” Martin said. “We probably did 50 sales that day. I’d say a good half of them were through the Square, and people bought more than they would have. The average number of units went up with the people who were using the square. They could buy $70 worth of stuff and not worry about having the cash. It’s really changing the way we do business.”
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