Coin is offering small businesses merchant processing for 2.55%, a rate 20-basis points lower than Square. Although the rates aren’t as low in most cases as those that Groupon is offering, Coin represents another competitor in a very crowded space. The savings are hardly worth crowing about: A merchant who processes $1,000 a month in transactions would save $24 over the course of a year compared with Square.
Coin’s circular device connects to a phone’s audio jack via a cable instead of mounting directly onto the device. Coin claims that mounted devices can damage a phone’s audio jack. Its Web site takes direct aim at Square, saying “So you can see, we actually thought a lot about how to build a better device rather than copy everyone else’s. Then we remembered something simple: The world is round, not square.”
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Unlike Square, Coin is offering businesses immediate access to money through an attached prepaid debit card. (PayPal offers a similar feature.)
Like the other services, Coin offers email receipts and apps for iOS and Android.
Austin, Texas-based RevCoin charges $9.99 for its reader but refunds the fee once a merchant has processed $400 in transactions. That may be a significant hurdle to adoption among small businesses, considering that other providers offer the hardware for free.
Another important difference is that Coin doesn’t process American Express or Discover cards.
I expect we’ll continue to see new competitors jump into this space. I’m still waiting for an octagon.