Small Business Owners: Transform Your Smart Phones into Credit Card Readers

/ BY / Small Businesses

As a small business owner, you want to make it easy for your customers to purchase goods and services—and that usually means accepting credit cards. But when you’re running a food truck, a craft shop or some other enterprise on a limited budget, you simply don’t have the money to invest in expensive credit card reading systems.

The solution is smart phone technology and mobile credit card processing apps.

How it works

Square was one of the first to introduce a mobile phone card reader into the U.S. market. That was in 2009. Since that time, the market has exploded, with dozens of companies offering their own variation on mobile credit card reading systems.

Some of the most well-known services include Square, PayPal Here, Intuit QuickBooks Go Payment Reader, PayAnywhere (from North American Bancard) and Amazon Local Register, but there are many more.

While each company has its own specific technology and systems, they all work in a similar manner. Most offer a device that plugs into the headphone jack of a mobile phone and an app that allows the device to read the card. A merchant swipes the card and the payment information is processed. Business owners get the money deposited into their accounts a day or two later.

Some systems also allow merchants to key in a customer’s credit card number (instead of swiping the card) and/or to go to a special website to process the transaction. Entering the data this way usually costs more than swiping, however.

What it costs

To start accepting credit card payments via your mobile phone, you’ll have to sign up with a service and get their card reader and their app (usually free). The cost of the service varies by provider.  For Square, there’s no monthly fee, but you’ll pay 2.75 percent per swipe for each Visa, MasterCard, Discover, and American Express transaction. PayAnywhere charges 2.69 percent, and PayPal Here charges 2.7 percent.

If you anticipate handling many transactions via the mobile phone app you may want to consider a service like Intuit QuickBooks Go Payment. If you’re willing to pay $19.95 a month, your swipe charge is just 1.75 percent, although you’ll also have a per transaction fee of 25 cents.

What you should ask

Before you sign on with any mobile credit card payment service, check around the web for reviews—what do business owners similar to you like and dislike about the provider you’re considering.  Be sure to check:

  • If the service will work with your phone’s operating system (IOS, Android, Windows)
  • If there are monthly fees, any initial sign up costs and/or any termination fees if you decide to switch to a different service
  • Cost per transaction (swipe and keyed) and/or any transaction fees
  • How long will it take the service to deposit your money into your bank account
  • What kind of customer service is available, and when they are available (live representatives, 24/7, email, etc.)

Providing a means of making purchases with credit cards is not only good customer service—it’s a great way to grow your business.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.