Gina Porto, employee at Carnivore BBQ, runs a payment through Square. (Mohana Ravindranath/The Washington Post)

In one year of owning K Street Café and Bagel, Eun Hopkins has gone through four different credit card processors. When she first took over the Washington, D.C. business, the previous owner left her a machine from Mercury Payment Systems – since then, Hopkins has tried Axiom Card Services, Merchant Financial Services, and finally Bank of America.

Every few months, representatives from card processing companies drop in or call Hopkins to coax her to use their payment service, she said. Each representative requests to see which system she is using, and then suggests she would save $150 to $200 a month by switching to theirs.

“Meanwhile, I’m not saving anything,” Hopkins said. Each time, she said she has been shocked by the hidden costs, leasing fees and contractual agreements required to use the device.

Such dissatisfaction has opened the door to a group of upstarts that are trying to undercut the big credit giants on fees with systems that make use of the technology many small business owners already own.

Hopkins, for instance, said a representative from a San Francisco-based newcomer called Square, Inc . approached her three weeks ago with an offer to try its technology, the most popular of which is a credit card reader that attaches to the earphone jack of a smart phone or tablet.

In contrast to most card processors, which typically charge businesses a percentage of each transaction as well as a flat fee of, say, 15 cents per sale, Square charges a flat fee of 2.75 percent per swipe.

Hopkins was intrigued. Now 200 to 300 of her customers each day use the Square reader attached to her iPad to swipe their credit cards. They sign for the purchase on her tablet’s screen, using their finger, and a receipt can then be e-mailed or sent by text to their phone.

Hopkins is still trying to adapt to the new technology. While she can easily process customers’ credit cards, she has not yet figured out how to use the Square Register app to offer promotions and discounts to Square customers, key features of the system.

“I wish we had more training, and more information on how to use it,” Hopkins said.

A representative from Square noted that Square does provide an online help site and welcome e-mails to each user.

Hopkins is one of 7,000 individuals and businesses in the D.C.-area using Square to accept payments, according to the company. Square-rival PayPal also recently developed a card reader attachment called PayPal Here, which charges businesses 2.7 percent per swipe.

With systems like Square, “at least you know what you’re walking into,” Hopkins said. But before she stops using her Bank of America register, she plans to compare the costs to see if she’s really saving money. (Bank of America representatives declined to comment on the competition between traditional card processing systems and systems like Square and Paypal.)

Though Square’s flat percentage fee might seem cheaper than the fees from traditional card processors, the ultimate bill can depend on the volume and size of a business’s sales, according to Burt Ely, an Alexandria-based banking consultant.

Companies processing many transactions can often negotiate lower credit card payment fees, giving them the edge on services such as Square’s. However, “when you have small transactions, the per transaction fee can be really prohibitive as a percentage of the sale price,” Ely said.

Mohinder Sharma, who operates a food truck near Farragut Square, currently uses a SunTrust Bank card processor, but is planning to switch to a different system in a couple of months—likely Square or Paypal Here.

SunTrust provides 91,501 active merchant card processing outlets in the United States, but Sharma said he thinks switching to a cheaper system “will be much better” and cut down on paper use.

Sarah Fatell of Grassroots Gourmet operates a delivery-only bakery from her kitchen, but is planning to open a storefront in October. She currently accepts PayPal online payments because her orders are large and she does not have a way to physically process credit cards. But once she opens her store, she plans to use Square on her iPad.

She said PayPal charges extra fees for certain transactions and frequently logs Fatell out of her account.

While Hopkins, Sharma and Fatell are eschewing traditional card processing devices to save on charges, other small businesses use systems like Square to draw customers. When Steven Adelson, owner of the Carnivore BBQ food truck, opened the truck a year and a half ago, he noticed other trucks using Square and followed suit.

“You’re not being a hip food truck if you’re not taking electronic payment,” Adelson said. “We’re like the grassroots technological outlet – to me it would be a little hypocritical to not take electronic transactions.”

Square’s 2.75 percent charge is the “cost of doing business,” Adelson said.

He estimates 80 percent of his customers use credit cards for payment – and on its busiest days, Carnivore BBQ serves up to 120 people.

Still, the alternative payment systems are not for everyone.

Andy Kim, owner of YellowVendor food truck, does not carry a phone or tablet that can support a mobile payment service. Kim avoids the costs of traditional card processors by only accepting cash—and while he acknowledges that getting a card reader might draw people, for him, “it doesn’t matter” — he gets plenty of customers already.

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