Did Square Kill Flint Mobile? What Flint’s Processing Shutdown Means for future years of Mobile Payments

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Should you&#8217re searching for any Flint substitute for low-volume or mobile processing, see our comparison article. 

Following the recent, shocking news concerning the stopping of Flint Mobile&#8216s payment processing service, many mobile-based and occasional-volume retailers are reeling, wondering how you can transition and what this signifies for future years of mobile payment processing. The implications of the disaster are far-reaching, and retailers will need to more carefully weigh credit card merchant account providers against mobile-only processors within their pursuits of low-cost, high-value payment processing options.

What Went Down to Flint Mobile?

On Feb fifth, without any prior warning, Flint abruptly suspended brand new signups and closed all card processing for current accounts. Users who attempted to process cards were met having a message saying, &#8220You have exceeded your processing limits.&#8221

While Flint&#8217s website continued to be largely unchanged, individuals people who visited the register button were met having a page that mentioned:

New Signups Suspended: We’re presently transitioning to a different platform. We thank you for persistence.

Users who contacted customer support to learn more were advised:

Appreciate your inquiry so we apologize for just about any inconvenience this will cause. Currently, we don’t come with an exact date for that unveil in our new platform.  We’ll contact you instantly when it’s available.

Regardless of how hard I (yet others) hounded customer support, no more information was handed until a full ten days later (many lifetimes within the eyes of the business requiring to simply accept payments), when Flint finally deigned to talk with existing customers.

An e-mail sent on Feb 15th mentioned that Flint was &#8220winding lower&#8221 operations, which the instalments service could be stopped on Feb 18th &#8211 an extremely meaningless statement, thinking about all users I spoke to have been without service because the fifth anyway.

Flint continued to state they could be transitioning payments to Stripe beginning on Feb 16th. Lastly, they informed current users that on Feb 27th, Flint services would go offline permanently. It&#8217s not obvious at this time whether or not they will really still offer the Flint application with Stripe integration beyond that date, and Flint hasn’t clarified any one of my queries in to the matter.

Why Flint is Shutting Lower

Lengthy story short, Flint has likely closed shop since it&#8217s not making enough money. The organization have been spending investor dollars to finance daily operations only at that juncture, the cash has dried out plus they simply can&#8217t manage to carry on at competitive rates. The margins in payment processing are razor-thin, and the only method to survive would be to scale up rapidly, greatly. We&#8217ve seen a number of other exceptional services shut lower with this reason &#8211 Balanced Payments is a superb example. Like Flint, they provided a substantial and valuable service, but merely couldn&#8217t contend with the kind of Stripe and Braintree available on the market payments industry.

It&#8217s obvious in my experience the folks at Flint wished up to the finish they can keep the doorways open, which&#8217s why there is practically no notice once the shutdown came. Clearly, the retailers affected could have been best when the transition have been planned and announced several weeks ago, but regrettably that&#8217s not the way it performed out. Now Flint users remain having a bad style of their mouths and should scramble to locate new solutions before their companies suffer much more.

The Main Difference Between Square and Flint

Square includes a quite strong platform. When it comes to features, software quality, and size user-base, no-one can contend with Square. They’ve brought the way in which for mobile processing forever, and then innovate rich in-tech, EMV-compliant hardware and extremely feature-wealthy software &#8211 all and keep prices low. Square has the capacity to offer almost unheard-of costs because investment money keeps flowing in, as well as an absolutely massive pool of retailers make use of the popular processing service.

So given each one of these positive characteristics, what&#8217s to not love? Well, should you take a look at my overview of Square or my in-depth consider its shortcomings, you&#8217ll observe that all the wonderful features offered come in a steep cost to users. Minimal customer support, rash account setup, and overall account instability frequently result in lengthy-term holds on funds in addition to sudden account terminations. On the top of this, Square&#8217s 2.75% flat processing rate may be simple, however it hugely overcharges retailers for debit transactions and enormous transactions.

Enter Flint. Flint came to the scene and solved all the problems Square produced. Flint was more selective using its account approval, and simple about processing limits. It had been all-around more conservative both when it comes to risk and price, and were able to contend with the behemoth Square without issuing any hardware whatsoever, rather choosing a method that used the merchant&#8217s smartphone camera to scan charge card figures. Flint&#8217s application was nowhere close to effective as Square&#8217s, however it was simple to use and have-wealthy enough to support an array of companies looking for an easy mobile solution. And also the icing around the cake? Flint offered a debit rate of just 1.95%, an exercise formerly unheard-of within the mobile processing industry.

Regrettably, because Flint processed all transactions as card-not-present &#8211 even if your card was really present &#8211 to prevent the requirement for hardware, the price that Flint incurred for running transactions was greater of computer must be (card-present transaction be eligible for a lower interchange rates). Additionally they overlooked the additional security of EMV nick and NFC transactions, while existing in a kind of EMV liability grey zone since card-not-present transactions aren’t susceptible to the liability shift that happened earlier in 2016. These 4 elements might have also impacted Flint&#8217s capability to compete within the cutthroat mobile processing market.

When push found shove, it really wasn&#8217t feasible for Flint &#8211 like a relatively business &#8211 to defend myself against the large mobile processors inside a lengthy-term way. Big the likes of Square their very own financial woes, but a minimum of an investment dollars still pour directly into bolster them, or their parent companies are capable of helping out. As I &#8211 and many more &#8211 thought Flint could create a good enough space to outlive, within the finish there just wasn&#8217t room and the organization wasn&#8217t in a position to adapt.

What Flint&#8217s Failure Means for future years of Mobile Processing

In my opinion, the closure of Flint implies that retailers now need to select. Flint straddled the road between a merchant account providers and Square-esque mobile processors. With Flint gone &#8211 and other alike services disappearing or disappeared &#8211 retailers must now approach their two options mind-on and choose making sense for his or her companies. The options are:

  1. Go and among the gargantuan mobile processing companies, like Square, Intuit&#8217s GoPayment, Capital One&#8217s Spark Pay, or PayPal&#8217s PayPal Here. For individuals who require a totally free fundamental POS, no fee every month, free hardware, not one other charges, and usually the cheapest cost all-in-one option possible, this makes a lot of sense. For any mobile-based business processing around 200 dollars each week, it&#8217s a no-brainer. However for a greater-volume business &#8211 especially individuals that aren&#8217t really mobile anyway &#8211 keep in mind that you frequently get that which you purchase. Rock-bottom cost and high-value don&#8217t tend to coincide, and you have to be conscious of the drawbacks.
  2. Go with a credit card merchant account provider, like Payline Data, Helcim, or Payment Depot. Merchant services will be handier and reliable than third-party processing accounts like Square. Retailers have a tendency to overestimate the price of a free account, actually because they’ve been grossly overcharged previously. The fact is that credit card merchant account monthly charges usually vary from $ to $20, as well as in most cases the cash you&#8217ll save by reduction of your processing charges will greater than purchase this fee every month. These accounts have couple of &#8211 or no &#8211 other charges, and also have no early termination charges. Your commitment level is the same for any month-to-month credit card merchant account because it is to have an account like Square, and also the customer support is nearly always many occasions better.

Merchant accounts often incorporate a free virtual terminal for entering card payments, along with a free fundamental mobile application for accepting payments on the run. You&#8217ll have in all probability to purchase the credit card readers &#8211 however this has become commonplace one of the mobile-only processors too. If you want POS software, you can buy a large number of options (including free software application) rather to be locked in a proprietary solution. And more importantly, you receive reassurance understanding that your bank account is stable and withheld money is unlikely.

What In The Event You Do?

The next move depends upon your company&#8217s unique needs and situation. What I will tell you is that this: I constantly see retailers grabbing a mobile processor like Square or PayPal Here from a feeling of perceived convenience and savings, while in reality they’d have less headaches and much more money staying with you when they chose a free account provider rather.

The days are gone when opening a free account meant a 3-year commitment enforced with a $500 early termination fee, of costly equipment leases totaling in 1000s of dollars per machine, as well as confusing contract negotiations. The brand new variety of credit card merchant account provider &#8211 and also the only type we have ever recommend at Merchant Maverick &#8211 offers month-to-month contracts, low-cost hardware, and transparent cost-plus prices disclosed openly as well as in full online. These businesses have adapted to some Square world, and they’re competing brilliantly.

Flint&#8217s downfall is really a cautionary tale, and something which should cause you to stop and provide pause. Mobile processing has certain natural aspects of risk, and could be a cruel mistress. Something similar to Square will make sense for the business, and perhaps it will likely be a great fit, however i&#8217d strongly encourage you to definitely run the figures and thoroughly weigh the advantages and detriments of the mobile-only processor versus a free account poor your unique business situation. The solution might surprise you.

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