iPhone App Adds Mobile Credit Card Processing to DIY Toolkit

Virgildickerson COLUMN: You Can Always Go Back To School by Virgil Dickerson of Suburban Home Records and The Vinyl Collective.

Iphone-terminal When you are on tour, invariably the situation comes up where a would be customer wants to purchase a shirt and a CD (who am I kidding, an LP), they don't have cash, and the ATM machine is either no where to be found or not working. This usually results in the concert-goer going home empty handed, but it doesn't have to.

I know that CD baby has offered bands a device that can make carbon copies of credit cards, but this doesn't help you if the card has no funds.You end up giving that person a free record or shirt when you go to run the card and it comes back declined. I have brought my laptop to events we had set up with the hope that the venue has wifi and I can log into my Merchant Account and use their virtual terminal to run credit cards, but that doesn't always work the best.

Innerfence now offers bands and well, pretty much anyone, the ability to run credit cards with your IPhone. And that isn't even the best part of the deal, for a limited time…

when you sign up for an Authorize.net account, you get a $50 ITunes gift card which cover the price tag of the application. With this application, you can run customers' credit cards and get an instant response if the transaction is approved or declined over any Edge, 3G, or Wifi network. You can read more about it on the developer's site and if you are considering it, I do recommend you read everything as there is a $25 per month service fee on top of what looks like pretty normal merchant percentages.

But think about the possibilities. You can now run credit cards at any event, and with Authroize.net, you can run credit cards on your website. We use Authorize.net for our online store and have been doing so for years and years and I could not give a better recommendation on their services. This might not be the answer for everyone, but I would think that a band that tours regularly could greatly benefit from this application. Check it out

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  1. I spotted this in the iTunes store earlier this morning and instantly thought of the same possibilities. However I think your customers are going to be pretty wierded out when you grab their credit card and start entering their credit card information into your phone. You would have to forewarn your customer to prevent any concerns or uneasiness and it would be great to have a “email receipt” feature.

  2. Sounds cool. I used to do CD Baby card swiper at shows. Then that artist upgraded to a machine that handled transactions via wireless ( I wasn’t manning the merch table by that time). Same concept as the iPhone, but quite a bit more expensive for the wireless credit card machine.
    The percentage of people buying merch with credit cards at shows was relatively small, but being able to take a credit card sometimes meant up we could sell $60 of merch to that person rather than $15. I’ve known bands who don’t want to mess with credit cards and tell everyone to find an ATM. But if you are doing lots of outdoor festivals, you may find there aren’t any ATM machines around.

  3. This is a really cool app.
    In addition to Gopi’s concern (which I think is legit for some potential merch buyers) I see a barrier and a concern:
    The barrier: You need an iPhone for this to work. Many artists on a budget don’t have one. This barrier will gradually decrease over time as this app gets rolled out to other smartphone devices (which I assume it will) and smartphones become more affordable.
    The concern: $25 a month (or $300 a year) is a very high price for convenience. At CD Baby our credit card decline or fraud rates are very low, in the low single digit percentages. The $25 monthly fee is the equivalent of two or three bounced charges (i.e. free CDs given away) each month for each CD Baby swiper account holder. Our historical rates are much, much lower, with the typical artist seeing less than one a month.

  4. these are all great comments. I might add that autorhize.net does offer the ability to send an email receipt to the purchaser. And besides being able to run cards on the Iphone (or Itouch), you can accept credit card payments on your website through your authorize.net account. I agree with Tony at CD baby that $300 a year is a lot of money, but it depends on your volume; between sales at your merch booth and on your site, it might be worth it. In these economic times, it is nice to know that a card is accepted or declined.

  5. Wow, the CD Baby one charges 12.8% per charge!
    The iPhone one does have that $25 monthly fee, but then you only pay 2.09% + $0.19 for each transaction.
    Let’s say you sell CDs at $20 each, then the cross-over point where the iPhone saves you money is around 15 CDs. The math is a lot trickier with the iPhone one, but you can definitely save a lot of money over CD Baby if you sell enough stuff:
    CD Baby (15 CDs @ $20)
    15 x $20 = $300
    $300 x 12.8% = $38.40
    You keep $261.60 of your $300.
    iPhone (15 CDs @ $20)
    15 x $20 = $300
    $300 x 2.09% = $6.27
    15 x $0.19 = $2.85
    $6.27 + $2.85 + $25 = $34.12
    You keep $265.88 of your $300.
    Effective rate: 11.4%
    CD Baby (20 CDs @ $20)
    20 x $20 = $400
    $400 x 12.8% = $51.20
    You keep $348.80 of your $400.
    iPhone (20 CDs @ $20)
    20 x $20 = $400
    $400 x 2.09% = $8.36
    20 x $0.19 = $3.80
    $8.36 + $3.80 + $25 = $37.16
    You keep $362.84 of your $400.
    Effective rate: 9.29%
    Here’s the iPhone pricing info:
    Here’s the CD Baby pricing info:

  6. Is it really that expensive to just get a credit card machine?
    or is it a connectivity issue that makes the phone more attractive?
    Why is it that Apple seems to be making the most money in the new music economy?

  7. trust is definitely a factor, but the more artists that use Authorize.net through their Iphone the more a potential customer will trust in the service. Maybe not the household name that Paypal is, Authorize.net is a well known, trusted name in merchant services. My company has used them for over 5 years and been completely satisfied with them.

  8. As a freelance web designer I did my research before purchasing an app that would allow me to accept credit cards on the iphone. After reading about “Billing Credit Card Terminal” I realized it was the best available app for this task simply because it did not lock me into having to use any service in particular outside of Authorize dot net. I felt this was key because at times I would want to explore better merchant offers and be able to switch services if needed and Billing allowed me to do just that plus it accepts signature capture and tips which is excellent. Check them out: http://www.spartadata.com

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