No business is small to keep up with the current trends and technological advancements. Currently, approximately 77% of all Americans prefer making plastic payments, which has made credit card reader for phone a vital necessity. The best way for entrepreneurs and small business to compete healthily in retail and professional space is being on board with popular tech that reduces the barriers between the business and customers.
Being able to make payments with credit card reader for iPhone & Android phone eliminates the need. This is a process of transferring money from your card to payer bank account. This is because credit card reader accept and process payments through mobile phone through a point of sale software. Most credit card readers operate at low costs but charge transnational and monthly fees.
How Does Mobile Phone Credit Card Reader Work?
As mentioned, credit card readers use the dongle technology to read and process both credit card and debit payments. Mobile credit card reader for phone works with the mobile point of sale software, an application that is installed to a phone or tablet. This provides merchants the option of accepting payments from credit cards without necessarily using the credit card.
That said, credit card readers process payments in three methods. They include:
- Magstripe : Is a short form for magnetic stripe. These cards store data in a magnetic stripe fixed at the back of the card. Data stored include the individual’s account number, name of the account, pin and expiry date of the card. This technology is being phased out slowly due to increased incidences of fraud.
- EMV Chip : EMV technology is the current payment option replacing Magstripe cards. Lengthily for EuroPay, MasterCard, and Visa, this option is becoming a common secure credit card payment method. This is probably because data on this chop is encrypted, making it hard to steal.
- Contactless : Contactless payment options are made through eWallet apps such as Google Pay and Apple Pay. This allows customers to store credit and debit card information on their phones. If a customer wants to pay using contactless option, they have to hold their phones against the mobile phone credit card reader and use fingerprint sensors to initiate the transactions.
Processing Mobile Phone Payments
The act of extracting data from a credit card is the first step. Once the mobile phone credit card reader archives the data, it sends to a payment processor. The payment processor contacts the merchant’s bank or the acquiring bank and customer’s credit card network or issuing bank.
The issuing bank checks to verify the transaction and if funds are available in the customer’s credit card account. If the issuing bank approves the transaction, it informs the payment processor that puts the funds on hold for a maximum of two days. This helps in ensuring that fraudulent transactions are not made. If there are no complains, the funds are then released to the merchant’s bank account.
Top 5 Best Credit Card Readers For Your Phones
1. Square Reader for Magstripe
Square Reader for Magstripe is undeniably the best credit card reader for phone for small businesses. It offers the simplest payment processing service that suits small enterprises that accept low-ticket sales. Square Reader is also very versatile and works with various card readers, be it online, countertop, or mobile phone solutions. Its powerful POS system also features essential business management tools.
- Pricing : As mentioned, Square Reader for Magstripe offers a low-cost or free rate processing fee despite the highly-rated point of sale software. It is the low cost that makes it unmatched with other options for use by small business. Among the Square card costs include;
- Magstripe reader is free
- Chip and contactless reader – $49
- Countertop solutions – $399 to $999
- Fees : Square card reader processing fees are high theoretically, ranging from 2.75% to 3.5% per transaction. However, compared to others, it ends up being the most affordable credit card payment option for phone, especially for small business that takes small payments.
- Payment processing options : Square credit card reader uses the Magstripe payment processing type, a system that accepts only credit cards with magnetic stripes. Whereas this is a secure option compared to keying in your credit card number, a better alternative is getting a chip with a contactless credit card reader that goes for $49.
- Business management tools : Square point of sale software system allows users access to free accounts where they can add, edit, and manage their inventories. Users can also collect essential customer information, track sales among other reporting features.
- Full-time customer support : Square Reader has full-time tech and customer support. In case of any arising issues, you can contact the support through email. Phone customer support is available during daytimes, from 6 am to 6 pm. To call, you need to sign in into Square’s website account for a code that comes in handy when making the calls.
- Free POS software with subscription
- Accepts contactless payments
- 24/7 available customer support
- Require separate, though free, Magstripe reader for different swipe payments
- Requires Android device, iOS, and subscription
2. 3 Pack Square Credit Card Reader for Phone
The 3 Pack Square Card Readers is another better option for those who want to save some money by buying 3 credit card readers. The reader works with all phones and requires a Square app to function.
- Consists of 3 secure card readers
- Possibility to ring up customers and track sales
- Up to date software with intuitive features
- Easy to use
- Great customer support
- Easy to set up
- Either of the cards can fail
3. PayPal Mobile Phone Credit Card Reader
PayPal Mobile phone Card Reader is available for both Android and iOS users. Using the card reader alongside PayPal’s mobile application enables merchants to accept direct PayPal payments, track sales, and manage their businesses. The card reader and payment processing are affordable.
- Pricing : PayPal comes with a free mobile phone card reader, just like Square’s, with a free chip card reader upon signing up for an account. Merchants can also purchase the chip separately with a contactless reader for $79.99. Mobile sales have no monthly charges, but those who want to use it as a virtual terminal will pay a $30 monthly fee. There are also no startup costs, and other rates are fixed.
- Processing fees : PayPal Mobile phone Card Reader has flat transaction fees, which are relatively lower. Some of its processing fees include;
- Swiped payments – 2.7%
- Keyed in payments – 3.5% + 15 cents for every transaction
- Invoice payments – 2.9% + 30 cents per transaction
- PayPal app : PayPal Mobile phone Card Reader works with the free PayPal app to make your iOS or Android device to a POS. PayPal app enables merchants to receive payments directly and credit card payments. Their app also has other basic POS features that help merchants manage their inventory and other business aspects.
- Payment options : Small businesses planning to use cards frequently will benefit from PayPal’s chip and swipe credit card reader. The reader can process Magstripe and chip cards at an affordable rate. Both the chip and tap reader accepts the three types of credit cards, which include the chip, contactless, and Magstripe.
- Business management : Like other credit card reader processors, PayPal Mobile phone Card Reader works hand in hand with the PayPal app that has POS features. The app can be downloaded to android and iPhone devices. Merchants can create permission for their employees to process sales from the app. Reporting feature enables merchants to track their sales by either time, product, or employee.
- Customer support : This card reader option has email, phone, and chat support. They also have a customer service page where customers can check for common questions and issues from the website. Merchants can also submit their inquiries through the PayPal resolution center.
- Available on Android, iPhone, and windows
- No monthly fees
- Live customer support
- Complicated to use
4. Shopify Chip & Swipe Reader
Shopify Chip & Swipe Reader is among the top-rated e-commerce solution that goes beyond online stories with payments app and credit card readers. The app can sync offline payments and inventory with Shopify online store. Costs are moderate with fixed rates for every fee. The only difference with other readers is the constant monthly fees for the online store.
- Pricing : Credit card readers from this option range between $29 and $89. However, there is an entry-level reader that is available free upon signing up for the account. Processing fees are not different from PayPal and Square’s fees. The only add-on is that merchants will have to sign up for an e-commerce account, which cost from $29 to $299 monthly.
- Ecommerce platform : The best feature about Shopify Chip & Swipe Reader over other credit card readers is that merchants get an eCommerce store alongside the credit card reader. Both the online and offline customer profiles automatically synchronize, therefore eliminating the hassle of managing separate software identities.
- Payment options : Shopify Chip & Swipe Reader can process EMV chip and Magstripe credit cards. This makes it a secure and better alternative to Square’s free payment options. It also works with both android and iOS devices, thus a versatile option. The advanced tap and swipe reader, which makes contactless payments costs $89 and can only work with iOS devices.
- Business management tool : Besides accepting payments using Shopify app, merchants can split tenders, add tips, and manage businesses with ease. You can manage your business inventory, add customer profiles, and track shop sales. The good thing is that data on the mobile phone app syncs with the Shopify e-commerce store.
- Free trial
- All-time customer support
- Free e-commerce platform
- Not a standalone service
5. PayAnywhere PAR – 1 Mobile Credit Card Reader
PayAnywhere PAR is another excellent credit card reader for Android offering free mobile phone card reader and swipe payments. The card has the lowest “pay as you go” rates, averaging at approximately 2.69% for every transaction. It also comes with free business management tools such as a barcode scanner thus a great choice for small sellers looking for a low-cost payment solution.
- Pricing : Just like Square and PayPal here, PayAnywhere PAR has flat-rate transaction fees, but with slight key differences. For instance, PayAnywhere PAR has low transaction fees compared to the two mentioned options. However, it has a monthly inactivity fee for businesses that remain inactive for 12 months without any transaction. It is also the only solution offering free card chip reader. Among the PayAnywhere PAR fees include;
- No monthly fees
- 69% in-person processing fee
- 49% keyed in transaction fees with an additional 19 cents for every transaction
- $3.99 monthly inactivity fee after 12 months
- PayAnywhere PAR payment options : This credit card reader is more or less similar to Square as it offers various mobile phone and countertop options to choose from. It comes with a free app that users can take advantage of accepting payments, viewing reports, and managing inventory. It also comes with a free Magstripe reader and free chip. The card reader accepts payments through android devices, iOS, and desktop computers.
- Business management tools : The reader has a paired mobile phone app where users can add product catalogs, manage inventories, send invoices, and generate receipts. Businesses can also check various transaction details, set up recurring payments, scan barcodes, custom reports, and set low stock alerts.
- Customer support : PayAnywhere PAR provides phone support from Monday to Friday working hours, which range from 8 am to 9 pm. Businesses can also get email and chat support during this period. For more information, merchants are advised to browse several articles available on the internet, including the website’s FAQs and YouTube tutorials.
- Charges low transaction fees
- Average customer support
- Mediocre customer ratings
The Bottom Line
Credit card readers with the best features gave the best payment processors. Before opting for one of the options mentioned above, consider several factors. These include the number and amount of transactions you expect to make monthly, specific needs of your business, average sales, and your type of customers as well. Understanding this will help you find a phone credit card reader that will provide immense value for your business.