Mobile Credit Card Readers and Your Small Business

Tablet and Smartphone Credit Card Readers and Your Small Business

Person scanning a credit card on a smartphone.

Instead of the traditional bulky, hard-wired card readers, these small, lightweight mobile readers plug directly into a smartphone or tablet, connect wirelessly, and allow a clerk or salesperson to run a credit or debit card from anywhere inside — or outside — the store.

For the larger-scale business owner, mobile card readers can change the dynamic of a store and how clerks interact with customers and conduct sales on the floor. For the smaller business operator who may or may not have a brick-and-mortar operation, these readers allow card transactions where previously cash exchanges were the only option. As fewer people carry large amounts of cash, mobile readers can be a game changer for those who run on-the-go businesses such as food trucks and on-site repair services, or do most of their sales from booths at trade shows, craft fairs, and markets.

Is a mobile card reader right for your business?

  • First, consider customers' purchasing attitudes and habits. Are they moving away from carrying cash and would they appreciate the card option? If so, would they feel comfortable having their card swiped on a smartphone or tablet? General acceptance of cashless payment is constantly changing, so it's hard to say how people will feel about it in a year or two, but you know your customers better than anyone else — give some thought to how they may react and adapt.
  • Will adding a mobile payment option open new revenue streams? A tablet or smartphone card reader could allow you to make more sales in ways and in places you hadn't been able to before.
  • And the big question: Will your business make enough card-purchase sales to make a card reader, with its associated fees, financially viable?

About those fees

  • Research your options when choosing a processing provider. In addition to banks, there are currently dozens of companies that specialize in processing mobile card purchases. Be sure to shop around and compare prices, plans, and make sure you're dealing with a reputable company. You can also ask other business owners about their experiences with the companies they may be using and their opinions of the specific mobile card readers.
  • Decide if you want a pay-per-use (pay-as-you-go) or contract plan . A rough rule of thumb is that if your business will be processing less than $2,000 a month in card-payment sales, you may want to consider pay per use. If, however, you do under $2,000 most months but have peak or spike periods when you go well over that, you'll want to average out the year and see if a contract plan makes more sense in the long term.
  • Be careful of hidden fees. Look at each processing company's various rates and per-purchase processing fees, keeping an eye out for hidden fees that could kick in. Again, one of the primary factors will be the volume and average value of your card-purchase sales.

Sound like a fit? Here's how to get started

  • Setting up a merchant account. Additionally for a mobile account, the processing company will provide an e-commerce payment gateway that safely and securely completes the purchases.
  • You'll need a smartphone or tablet. You'll have to decide, however, if you want a separate phone or tablet specifically for your business (with the extra cost of an additional service and data plan) or if you — and your customers — will feel comfortable using your personal mobile device.
  • You'll also want a card reader. It's possible to simply type a customer's card number into your phone or tablet, but it's unlikely you'll want to deal with that constant hassle and its potential for error. So you'll probably want a portable card reader — a small piece of hardware that plugs into your mobile device and allows you to physically swipe a card. In most cases these card readers are provided by the processing company.
  • Make sure your equipment meets minimum standards. When selecting a processing company, make sure their card-reader hardware and software is compatible with your current smartphone and/or tablet. Some companies' devices work across a variety of systems, but others will only operate with the more popular devices. You'll also have to download special software onto your device or an application that runs the processing, and you may need accounting software on your computer to handle the management reports that come with these services.
  • Do you have the correct network connections? Some card processing services operate via your phone or tablet's mobile network, but others require a Wi-Fi connection. If it's the latter case, you'll want to make sure you'll always have reliable Wi-Fi service wherever you plan to use your mobile reader. Keep in mind that if you plan to have multiple clerks making transactions from several devices at the same time in your store, it could slow down Wi-Fi processing speeds.
  • Consider the processing provider's training and tech support. Will they help you learn how to use all their service's options? Will you be able to easily contact them during or after business hours if you're having problems, especially during the early stages of using their product? Make sure the answer to both of those questions is yes.

For many small business operators, the question isn't whether to accommodate cashless purchases but when and how. When looking at mobile tablet and smartphone credit card readers, take time to evaluate your business' card-processing needs, research the available services and fees, and then choose the option that best fits your sales needs.