- Intuit’s GoPayment Cuts Transaction Fees, Pricing Now More In Line With Square
- Internet Entrepreneurs Are Like Professional Athletes, They Peak Around 25
- The Cloud Has Us All In A Fog
- Gillmor Gang 4.30.11 (TCTV)
Posted: 01 May 2011 07:32 AM PDT
Inuit’s GoPayment reader, which competes directly with Square, is about to become more attractive to small businesses today. The company has made the decision dropped the transaction fee ($0.15 per transaction) for both new and existing customers for Visa, MasterCard and Discover cards, both swiped and key-entered as well as qualified and non-qualified transactions. The move will go into effect on Monday.
Launched two years ago, GoPayment offers a complimentary app and credit card reader to allow small businesses to conduct charges via their smartphones. GoPayment is available for iOS, Android and Blackberry phones. So now, businesses using the mobile payments reader will only pay a flat 2.7 percent fee of a transaction for any swiped cards. Intuit will charge 3.7 percent for both key entered and non-qualified transactions.
This is surely a competitive move against Square, which also dropped its transaction fee (which was $0.15) recently in favor of a flat $2.75 percent fee for all transactions. One important fact to note—Intuit will still charge the transaction fee for transactions using American Express but this is something the company is working on negotiating. Square does not charge a fees for transactions on Visa, MasterCard, Discover and American Express.
For higher credit card processing volume (recommended for more than a $1,000 per month), Intuit is continuing to charge a $12.95 monthly fee but has dropped the set transaction charge of $0.30. The per transaction percentage remains at 1.7 percent for cards swiped; and 2.7 percent for key entered.
Mobile payments is a competitive space and it’s hard not to notice some of the attention Square has been getting from both Visa and Apple. Because of this, companies like Intuit have to up the ante to remain competitive and attract businesses. For example, Intuit recently extended the offer of a free version of its GoPayment reader indefinitely. Square’s readers have been free for some time now.
Chris Hylen, VP and general manager of Intuit Payment Solutions said this explaining this change in pricing: We started simplifying GoPayment pricing back in January when we eliminated the monthly fee. Now we're removing transaction fees. As we continue to evaluate the market and talk with customers, we believe that making our pricing even more affordable is the best way to give more people an easy way to process credit cards on their mobile devices.
While Square is growing fast, as more and more businesses are looking for innovative, inexpensive and painless ways to accept credit cards, Intuit’s reader does offer a compelling product. The company reports that it has seen a nearly 700% increase in the number of people signing up for GoPayment each week compared to the beginning of the year (driven in large part its free swiper offering). Intuit declined to reveal exactly how many users are signing up per day vs. a year ago.
And GoPayment users are processing in excess of $15 million a week using GoPayment and related services. These services also include payments from the Web and through QuickBooks using a GoPayment merchant account, so it’s unclear how much of that $15 million is coming through the readers themselves. Intuit says GoPayment users have processed more than $3 million in a single day over the past month as well.
For basis of comparison, Square just revealed that it is processing $2 million in transactions per day and $66 million for the first quarter, but COO Keith Rabois says forecasts that this number will triple in Q2.
The other competitor in the space, VeriFone, has yet to eliminate the set transaction fees ($0.17) associated with its payment product. But with pressure from both Square and Intuit, that may change soon.
Posted: 30 Apr 2011 11:27 PM PDT
“Consumer Internet entrepreneurs are like pro basketball players,” a venture capitalist told me recently while discussing the prospects for a thirty-something founder, “They peak at 25, by 30 they’re usually done.”
Why? Because young entrepreneurs are more creative and imaginative, and are willing put 100% of their lives into their startups, he said. “It’s not a guess, this is a data driven observation,” says the VC.
He had a number of caveats. First, this only applies to consumer Internet entrepreneurs. Enterprise and hardware startups tend to do better with older founders, where experience (and direct sales experience) matter a lot. And there are plenty of founders that, like Michael Jordan, can peak way beyond 25 (and the peak basketball age is really probably at least a 27). “Those tend to be the repeat success founders,” he said, “the rules don’t apply to them.”
Peak age of startup founders is an endless debate. Vivek Wadhwa says his data shows that older entrepreneurs are more successful, for example. He argues that ageism is more about exploiting young people more than getting value for money.
Other data suggests the opposite. Like this – last year Y Combinator said the average age of their founders is 26. Of course they could have selection bias, but Y Combinator is one of the most data driven investors I’ve heard of. if older people did better, they’d be funding more of them.
At Disrupt in New York in May we’ve got a very cool interview planned. SV Angel says they’ve analyzed deep demographic data for their 500+ investments over the last twelve years or so. It takes years to know how successful a startup will eventually be, so this is particularly valuable data.
Will they agree that Internet startup founders should be looking to make a name for themselves before they hit 30, or give up? We’ll know in a few short weeks.
Posted: 30 Apr 2011 12:05 PM PDT
Ever heard of Dropship? It’s an open-source project that “enables arbitrary, anonymous transfers of files between Dropbox accounts.” Dropbox hopes you haven’t; they tried to squelch it this week, and even accidentally reported that it was subject to a DMCA takedown notice, with predictably futile results. I’m mostly sympathetic: I’m a huge fan of their service, Dropship was a clear violation of their terms, and for obvious reasons they don’t want to turn into an anonymous peer-to-peer file-sharing service. Unfortunately, they accidentally built a system which enabled just that.
How about Sony’s PlayStation Network? Of course you have. It was so thoroughly hacked this week that Sony had to shut it down indefinitely. Did you also know that Sony’s PS3 firmware is effectively wide open, because they made a hilariously stupid security mistake? Did you know that that’s probably how PSN got hacked, and that it raised the spectre of the hacker(s) taking over every connected PlayStation 3 in the world and turning them into by far the biggest botnet in history? That probably wasn’t what Sony had in mind, but they accidentally built a system which enabled just that.
How about the new Google Docs Android app? Came out this week, and it’s pretty great. Among its many features is the ability to take a picture of an image with text and have that text automatically OCRed and turned into a document. Can’t wait ’til they integrate Google Translate into that, too, and recapitulate last year’s hot app World Lens. But I bet book publishers are pretty unhappy. Not long ago, if you wanted to scan a book you had to actually build a scanner, or buy a copy and turn every page. Now would-be book pirates can just crowdsource 10 people to go to bookstores and take 20 pictures each, et voila: 400 scanned pages in Google Docs. Easier book piracy probably isn’t what Google had in mind, but they accidentally built a system which enables just that.
This was also the week that people who keep remotely controllable Internet-enabled camera/microphone/GPSes on them at all times expressed outraged surprise when they learned their privacy is at risk. The panopticon probably isn’t what the mobile industry had in mind, but they accidentally built a system which enables just that.
What do these all have in common? The unexpected results of connecting client devices to the cloud. (Yeah, I don’t really like the term either, but it’s better than the alternatives.) People talk about “moving to the cloud,” as if we haven’t already. The heavy lifting may happen on the server farms (when they’re up) but every connected computer, phone, and game console already serves as a computing cloud’s eye, ear, and tentacle.
Emergent properties. Unintended consequences. Get used to ‘em. My favourite Douglas Adams books are the Dirk Gently novels, in which the protagonist makes use of “the fundamental interconnectedness of all things” to solve crimes in hilariously unexpected ways. Now we’re literally building that interconnectedness into (nearly) all things. So we shouldn’t be too surprised to find ourselves moving into a Dirk Gently future, in which off-kilter left-field ricochet consequences happen at an ever-increasing rate. You can bet that those cited above are just the beginning — and that there’s a lot of money to be made in seeing them before they happen.
Photo credit: Aspex Design, Flickr
Posted: 30 Apr 2011 10:00 AM PDT
The Gillmor Gang — Kevin Marks, Danny Sullivan, JP Rangaswami, John Taschek, and Steve Gillmor — christened the new Gang studio with a surprise welcome to Kevin Marks. It turns out he’s joining salesforce.com on Monday, following JP (six months), JT (7 years), and me, who is celebrating my one year anniversary. Kevin has been a forceful champion of open standards at Apple, Technorati, Google, BT (Ribbit), the Gillmor Gang, and now salesforce.com. Before, and once the festivities were out of the way, we got back to Gang business, namely the continued aftermath of the phone location recording crisis.
With free lunch debunked, we tackled the Amazon outage and its impact on the Cloud. You can decide for yourselves, but the consensus is that such challenges will be remembered fondly as a validation of the moment, as with the Gmail outage of several years ago, when the Cloud passed from inflection point to basic services. The velocity of business in the iPad age, where CEOs can see deeply into their companies in realtime, demands a level of interactive services and an iterative feedback loop not possible with the previous generation of software. And that lead to a debate about iPhone video calls and what Danny is looking for in a flying car.
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