Intuit raised eyebrows in early January when it rolled out a free version of its Square-competitor, GoPayment, which is a mobile payment application and small credit card reader that attaches to smartphones. The caveat to the free version, as reported by Fortune, was that businesses had until mid-February to sign up for the free service, whereas Square is and always has been free to users (minus the credit card and processing fees). Today, Intuit is announcing that it will continue to offer GoPayment with a free credit card reader and no monthly fee for an indefinite amount of time (the offer was originally scheduled to end yesterday). The company also says that since the initial free offer, Intuit’s customer acquisition rate for GoPayment has more than tripled.
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.
GoPayment now offers two payment plans to choose from: For lower or intermittent credit card processing volume, Intuit offers a free credit card reader, no monthly fee; and discounted rates (2.7 percent for card swiped; 3.7 percent for both key entered and non-qualified transactions; $0.15 per transaction.) For higher credit card processing volume (recommended for more than a $1,000 per month), Intuit offers a free credit card reader; $12.95 monthly fee; and further discounted rates (1.7 percent for card swiped; 2.7 percent for key entered; 3.7 percent for non-qualified transactions, such as corporate cards; $0.30 per transaction).
That compares to Square, which has always offered a free reader with no monthly fee and currently charges 2.75 percent and $0.15 for swiped transactions and 3.5 percent and $0.15 for keyed-in transactions.
While Intuit is clearly growing in terms of usage and sign-ups, so is Square, which is unarguably a smaller operation with a lot of buzz. Fresh off a $27.5 million funding round, Jack Dorsey’s startup is expected to process $40 million in transactions in Q1 of 2011.
Clearly, this is a competitive space. What Intuit has in its favor is that it already has a built in small business network with users of its popular business applications, including Quickbooks, Quicken and TurboTax. And another player has joined—VeriFone entered the mobile payments arena with a deal with PayPal. Intuit is no doubt extending its free version because it is getting more traction from small businesses with a less-costly GoPayment product.
Perhaps Intuit should spring for a Times Square billboard.