Square leads the spring of mobile phone card reader

Founded in 2010, Square was a hot-star start-up in the United States with a hardware product plugged into the phone's audio port. "Allow everyone to receive credit card payments. "This is the advertising language of Square, a well-known American mobile phone payment company. At present, Square is leading its Chinese disciples together to usher in the spring of mobile phone card reader.

Square in the United States by a large number of users of small and medium businesses to receive orders

The same hardware, the same phone card reader, a hot business model in Silicon Valley, has a completely different story in China.

Square's phone card reader can achieve personal (mainly individual merchant) credit card receipts, because the United States POS machine is very expensive, this function greatly reduced the burden of small and medium-sized businesses in the United States, so that square can develop rapidly.

Square's April figures show that its payments are up 25% per cent a year, and the annual deal will be $5 billion trillion. Square is valued at $4 billion, according to the financing of the month.

But the same pattern is hard to replicate in China.

Domestic facing small merchants difficult to pass

Tuesday, domestic payment company Lakara announced the introduction of mobile phone card reader, this is used in the United States as a merchant credit card receipt of products, to China into the individual users of the "debit card inquiries, credit card repayment, personal loans, transfer remittances, personal accounts, convenient payment and online shopping specials."

"We are totally different from square in product and business models, and we focus on personal mobile payments, not for businesses." "Lakara chairman Suntaujan said to Sina Technology, Lakara's goal is to build a convenient payment ecosystem, whether it is a mobile phone card reader or computer card reader, are part of it. Previously, Lakara had deployed 60,000 convenient payment points in convenience stores nationwide.

The reason why Lakara do not take businesses as a starting point is that their demand is not strong.

"Foreign POS machine fees are very high, but also charge a high cost of equipment management." Counter-view at home, the price of POS machine war has been beaten, a little more reliable store can give you a POS machine, many machines are free, and even free service charges. "Hainan Airlines under the new students to pay Business-to-business product owner Lu Tianxun said, mobile phone card reader can save a lot of costs for foreign merchants, and at home, these costs are almost non-existent, businesses do not need to use mobile phone card reader.

"Chinese consumers are very sensitive to security and integrity, for consumers accustomed to the POS machine card, the business suddenly come up with such a nondescript gadget, consumers feel insecure." "Lu Tianxun said," Many domestic credit card users dare not easily in unfamiliar terminals on the card, dishonest businessmen, malicious business story heard too much, everyone is afraid. ”

Credit Card Payment Barriers

In addition, the domestic credit card payment barrier, but also to a certain extent, limited the mobile phone card reader application scene.

Because the domestic face credit card risk, domestic mobile phone card reader does not support personal credit card receipts. In other words, if a user needs to pay a friend, they can only use a debit card instead of paying with credit cards.

A pay industry expert told Sina Technology, because the United States credit card application scenario is very broad, where the basic can be used to pay the credit card, there is no need to buy cash. In addition, the U.S. financing environment is relatively good, small and medium-sized enterprises do not need to use to prepare funds. More importantly, the cost of this kind of cash is very high, for example, you are 100 yuan, may actually only get 97 yuan, so the credit card is now very rare in the United States.

In China, the credit system is still not sound, the credit card malicious fraud of the news is often in the newspapers. To this end, China issued a strict law, according to the "PRC Criminal Law Amendment", knowing that there is no repayment capacity and a large number of overdraft, can not be returned, to be sentenced to 3 years imprisonment or criminal detention.

"Foreign credit card is free to take now do not charge additional fees, domestic credit cards to collect the current bank fees, POS machine set is now strictly restricted by the policy." "Lu Tianxun revealed that UnionPay hopes to control the POS terminals to manage credit card and merchant tax evasion, so once there is a mobile phone card reader so do not take the usual road terminal appears, management will be very confusing.

Lu Tianxun said that for the payment of the company's innovative products, UnionPay some resistance, the CBRC is also relatively conservative, some banks and such companies to carry out the receipt of a cooperation requires customers to deposit in full. Therefore, the policy risks, to some extent, hinder the development of such products.

The business future of mobile phone card reader

Although there are various restrictions, but in the domestic mobile phone card device spring seems to have arrived. In addition to the above mentioned Lakara, domestic involvement in such products also include Tencent's investment in the lottery, and pay close cooperation with the box payment, Chanfong pay more than 10 companies. Most of them chose the individual user as the cut-in point, Lakara is just a typical representative.

Profit model, and square free, charge a follow-up fee model different, Lakara mobile phone card device hardware price of up to 199 yuan.

"Compared to the problem, 1991 is not expensive, buy an iphone shell and 200 yuan." "Suntaujan said," The card is a hardware cost, we can not sell a loss of a Taiwan. ”

Suntaujan explained that Lakara annual research and Development on the investment of about 30 million, 199 yuan pricing is based on the cost of accounting out, will continue to reduce the price. "Perhaps in the future, users in every customer to buy things to a certain amount of a customer can send you a, electric dealers want to give their users some value-added, Lakara card reader will be more integrated into the promotional activities of the electric business." ”

In addition, as with other third-party means of payment, the collection of fees is also one of the profit patterns of Lakara mobile phone card reader.

According to the central bank issued "bank card business Management measures", the standard is that the hotel, catering, entertainment, tourism and other industries shall not be less than 2% of the transaction amount, other industries shall not be less than 1% of the transaction amount.

At present, Lakara has been with Taobao, red children, Amoy, where to go and other E-commerce platform to cooperate in its mobile phone client embedded Lakara payment system, consumers in the mobile terminal credit card payment, Lakara can get the fees.

For the future, Square and his Chinese disciples have completely different ideas, their story seems to be more beautiful.

Square's next step is to "brush the face."

On a sunny afternoon, you get out of the mall, open the Square app in your phone, search the nearest ice cream shop, choose a "Medium snowstorm" and click "I want to pay". Your photos and names are quickly uploaded to the ice cream store's ipad.

5 minutes later, you go into the ice cream shop and smile at the waiter and say, "I'm Zhang." "The waiter checks your name and photos, hands you a blizzard, clicks" Confirm, "and the credit card bound on square automatically completes the payment.