One of the most discouraging things about the last two years was seeing swing voters in focus groups, when asked what President Obama's economic strategy was, repeat different versions of "Well, I know he said we needed to save the banks. Beyond that, I'm not sure." When Obama in his first State of the Union gave a vigorous defense of bailing out the banks, saying he knew it about as popular as a root canal, and saying "I get it", it was very memorable to voters. But when his predictions about what would happen when the banks were stabilized -- they would start making loans to businesses, and businesses would start hiring -- didn't happen, and instead the banks gave themselves record breaking bonuses, voters turned on Obama fast. In exit polls on Nov. 2nd, when asked who was most to blame for the bad economy, voters by a wide margin said Wall St. was most to blame, and the voters who said that went Republican by a 14-point margin.
Obviously, saving the banks hasn't been the President's only economic strategy. The stimulus bill, while too small, was an important job creator/saver. Saving the American auto industry was an incredibly important thing to do. Health care reform was in part a long term economic strategy. The infrastructure bank idea is a great potential job creator. Extending unemployment insurance helps keep money in the economy. And all the tax cutting going on is clearly meant to have some stimulative effect, although how much is highly debatable.
However, there have certainly been times where Secretary Geithner, who has been the main driver of the economic strategy, seems to think and act as if helping the big banks and helping the economy amount to the same thing. The tepid reaction to the foreclosure crisis has sure felt that way -- apparently we can't freeze foreclosures or do much to help homeowners because it might "endanger" the banks. In fact, I would argue the exact opposite: that our number one economic strategy right now should be to shift money from the big banks to the real economy, to Main Street businesses and workers and consumers. The big banks are hoarding extraordinary amounts of money, and they are clearly not investing it in job creating businesses. They are speculating with it, they are trading with it, they are investing in complicated financial instruments that do nothing to create jobs- in fact, they are sucking capital out of the real economy that might actually create jobs. These massive financial conglomerates have way too much concentrated wealth and market power, and that is weakening the rest of the economy.
This is one reason why, as I wrote a couple of times last week, it is so important to write down the mortgages of homeowners who are underwater. Taking that money out of the bankers' hands and putting it in the hands of the hard pressed middle class would do more to stimulate the economy than any other thing the President could do right now. This is also why the Federal Reserve's new proposed rule, out last week, on swipe fees is so good. It would generally limit swipe fees to 12 cents per transaction. Right now the average is 44 cents, and with most small businesses it's quite a bit higher. If this rule is upheld, this is money that will go straight from the big banks' profit margins into the main street economy -- all told, probably a $15 billion boost going back to retailers, restaurant owners, taxi cab drivers, and hopefully consumers. $15 billion going from Wall Street, speculative economy into the real economy is a nice lift right now. This is why I have been working with retail business leaders and consumer groups to support this new regulation.
Unfortunately, not all Democrats see it this way. Tom Carper and Mark Warner tried to head off the amendment that made this regulation happen in the Senate, and have been lobbying the Federal Reserve against a strong regulation on the subject ever since they lost the legislative fight. And Barney Frank, who is a great liberal on social issues but spends way too much time with bank lobbyists, was whining on Friday how unfair the proposed rule was to the poor bankers.
Barney, you got this one wrong. Democrats should not be looking out for the bankers, we should be looking for every single opportunity we can to drain the Wall St. swamp. The big banks are hoarding money. They have way too much market power, and when their profits expand, they put that money into the speculative economy rather than the real economy that manufactures goods, sells products and services, and creates jobs. When we take a dollar away from them, and put it into the real economy, there is actually a multiplier effect as people on Main Street spend or invest the money in real products. When mortgages get written down, it helps the real economy. When swipe fees on credit or debit card transactions get lessened, it helps the real economy. If we instituted a transactions tax on every trade made on Wall St, and put that money into a jobs program, that would help the real economy.
The big banks are hoarding our money. Our best economic program right now is to shift money from the banks, and put it into the hands of consumers who might actually buy products and businesses who might actually hire more workers.
Convenience is the general theme that our society has been speeding towards, getting things fast and easy, that’s the way we like to roll. We can see this through the popularity of services like Netflix; instant movies, and iTunes; instant music. Credit cards in essence, are fast money, but not fast enough.
Services for taking payments on your iPhone is relatively new. A company called Square released an app and dongle last May that would allow users to accept credit cards from their iPhone, it has since caught on and many variants including card readers are hitting the streets. Enabling small vendors, artists, even used item hockers, to charge their customers via the seamless instant swipe of plastic.
In the last two days two companies have begun offering credit card reader swipers free to new customers. Intuit Inc. is one of them, makers of the ever popular Tax accounting software. They want to give the little guy a small boost by offering its GoPayment mobile payment service, which will include a free credit card reader and zero monthly service fees, for business owners that sign up by mid-February.
GoPayment is a system that utilizes mobile handsets, like the iPhone, and uses them as a cost-effective method of processing credit transactions. Since its launch almost two years ago GoPayment has enabled small businesses to process $80 million in mobile transactions using a mobile handset and the GoPayment system, and the market is still expecting significant growth in the coming years. GoPayment is compatible with more than 40 handsets and a large range of traditional credit card readers, this includes the popular credit card reader from ROAM Data, which is used with a variety of iPhone, Blackberry and Android devices, making it more accessible for a new start-up business owner to start accepting mobile transactions.
“By offering a free card reader and no monthly service fees, we want to give more small businesses a head start in the New Year by enabling them to take mobile payments without any upfront investment,” said Chris Hylen, general manager of Intuit’s Payment Solutions division. “And this is just the beginning. We’ll introduce new ways all year long to help more small businesses get paid quickly and inexpensively using their favorite mobile devices.”
GoPayment offers a selection of different rates and pricing plans to accommodate any business’s needs. There are no long-term contracts, or any hidden cancellation or setup fees, and one account allows up to 50 users. Their app is called the Intuit GoPayment Credit Card Terminal and is free from iTunes. Below is a brief highlight of the general pricing plans for the service.
For lower or intermittent credit card processing volume:
No monthly service fee for businesses that sign up before mid-February
Discount 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:
$12.95 monthly service fee
Discount rates: 1.7 percent for card swiped; 2.7 percent for key entered; and 3.7 percent for non-qualified transactions, such as corporate cards; $0.30 per transaction.
The second is from App Ninjas, developers of Swipe Credit Card Terminal for iPhone, today have decided to give away the Apple-approved Credit Card Swiper for iPhone 4 and iPod touch hardware free to all new users who sign up by January 15th. Their app that works with the swiper is available on iTunes for 99 cents and is called iSwipe Global Credit Card Terminal.
Their fees are as follows:
- 1.74% VISA/MasterCard Qualified Discount Rate
- 2.29% VISA/MasterCard Mid-Qualified Rate
- 3.79% VISA/MasterCard Non-Qualified Rate
- $0.24 per Transaction
- $24.95 per month (Includes Authorize.Net Fee)
“Providing iPhone 4 and iPod touch users with a swipe accessory allows any mobile merchant to quickly process transactions, saving them money and time,” said John Waldron, CEO of App Ninjas. “Swipe’s features help manage credit card transactions with virtual terminal access, online reporting, real-time authorizations, and premium customer support, including access to a customer support rep assigned to their account, from the moment they download Swipe.”
Depending on your business, how many transactions you expect to do, and the payment gateway you are dealing with either solution could be good for you. We haven’t had any hands-on time with either products, so we’re unsure of the reliability and ease of use between both products.
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