More changes come to mobile payments industry

The mobile payments industry is one that changes rapidly, and two recent announcements might fundamentally alter the way in which two separate kinds of transaction are handled.

The first announcement comes from the popular national chain Dunkin' Donuts, which recently launched a new smartphone application that allows users to pay using their mobile device as a means of expediting their coffee, muffin or doughnut purchase, according to a report from the company. The other was issued by the mobile payment processor Square, which will soon allow small businesses that handle large amounts of transactions to pay a flat monthly rate for all their card processing, rather than a swipe fee for every purchase made.

A new approach to an old idea
The Dunkin' App allows users to load money onto their accounts and then scan their smartphone either at the register or the drive-through to complete a purchase, the report said. This system is similar to the company's existing Dunkin' Donuts Card program, which can be used in the same way, but does take it virtual.

The Dunkin' App can be used in conjunction with any credit or debit card issued by American Express, Discover, MasterCard or Visa, the report said. Balances on the virtual accounts are updated immediately after making a purchase, meaning users will always know how much they have remaining on the account.

Perhaps more impressive, however, is that the Dunkin' App allows users to send and receive virtual gift cards to friends, family, coworkers, and so forth, the report said. It is the only national coffee chain to allow this type of transaction, and the gift amounts, which can range from $2 to $100, can be sent via email, text or even Facebook.

"Dunkin' Donuts is committed to developing and delivering technology that supports our growth and distinguishes our brand for offering the very best guest experience," said Nigel Travis, Dunkin' Brands chief executive officer and Dunkin' Donuts U.S. president. "Today's launch of the new Dunkin' Mobile App is an exciting and important day for both Dunkin' Donuts' guests and our franchisees. This is a clear example of our determination to invest in technologies that help us exceed our guests' expectations and enable our franchisees to run their restaurants as efficiently and effectively as possible.”

John Costello, Dunkin' Brands chief global marketing and innovation officer, further noted that customers using the app will make visits to the chain more convenient by expediting the purchasing process. To that end, the app is already available as a free download for the iPhone and iPod Touch, as well as Android handsets, the report said.

Square's new idea
Meanwhile, Square recently revealed its plans to create a new pricing structure for its small business customers that could save some owners considerably over the course of a year, according to a report from the tech startup. The company typically charges a 2.75 percent swipe fee regardless of the credit or debit card it processes, but is now giving companies that handle a lot of transactions a way to potentially save money.

Instead, it now offers companies the ability to pay $275 per month in exchange for no longer having to pay a swipe fee, the report said. This option is available for merchants who process up to $250,000 per year – about $21,000 per month. Opting into this plan involves no additional fees and does not require the user to sign a contract.

"For 62 years, merchants have suffered complicated, expensive processing fees," said Square chief executive officer and co-founder Jack Dorsey. "Square is the first company to rethink electronic payment pricing with the merchant in mind. We are giving merchants affordable, predictable pricing. With one monthly price, merchants know that the sales they’ve processed in a day is the same amount deposited in the bank."

However, there are some restrictions, the company said. For instance, transactions of larger than $400 are still subject to the 2.75 percent swipe fee, as are any purchases that go beyond the $250,000 per year limit. Further, card transactions that are entered into the card reader manually come with a transaction fee of 3.5 percent plus an additional 15 cents.

What consumers can do
The mobile payments industry is changing in myriad ways and companies involved in it are always trying to keep up. Some consumers may find that joining one of these many programs will be beneficial to them because mobile transactions are more secure than traditional credit card use.

However, if you are concerned about the state of your finances, you should check your credit report regularly. This will help you to identify any potentially unfair markings that may be dragging your credit score down, and working with a credit repair law firm can help correct these issues.