Mobile credit card readers: everything you need to know

By | 2017-12-16T11:26:48+00:00 December 11th, 2013|Tags: , |

Mobile credit card readers that connect to a smartphone or a tablet are profoundly changing the way anyone with a business can take credit card payments. This means that the size of your business is no longer an issue and everyone can take credit card payments.

Thanks to this new generation of mobile credit card machines, offered by companies like iZettle, SumUp and PayPal, it no longer matters whether you are selling handicraft goods at a local craft fair or have a larger business offering services and goods on a bigger scale.

All you need is your smartphone or tablet, a free app and a chip and PIN device, and you are ready to go!

Mobile credit card readers changing the game

The need to take card payments and mobile payments is simply a fact of business life today. Consumers are carrying less and less cash around and find using cards or payment methods like Apple Pay not only more convenient but also a better way of managing personal finances, even when paying for small amounts.

In the past, a conventional credit card terminal would not have been a practical solution for a small business with low transaction volumes due to the monthly fees and terminal rental costs.

However, the low price of modern smartphone credit card readers is a major reason why anyone with a business should consider signing up for one.

Users download the free app for the service of their choice to their Android device, iPhone or iPad.

Quick facts

  • Works anywhere you have WiFi or a 3G/4G data connection for your phone or tablet.

  • Free Android or iPhone/iPad app operates the card reader.

  • No monthly contracts.

  • Merchants only pay per card transaction

The card reader can be purchased for a one time fee in the range of £25 to £75. To take a payment, the card reader connects to the smartphone or tablet by Bluetooth.

In the UK, mobile credit card readers do not have any monthly fees or lock-in contracts. The only charge is per card transaction which range from 1.5% to 2.75%. There is no need for a separate merchant account, only a bank account in the name of  your business or association.

Previously some of the card reader providers allowed accounts for private individuals, but this is no longer the case, though of course sole traders can register freely.

Most of the services include a wide number of credit card brands in their package of accepted cards, including American Express.

The innovation

The new generation of mobile card payment systems (like Square, iZettle, and SumUp) should not be confused with traditional countertop credit card readers and terminals, which have of course been around for a long time. These credit card terminals are connected by a landline or Ethernet cable and shoppers enter their pin number on the keypad to authorise the transaction.

There are also mobile and portable versions of these traditional credit card readers, and these mobile credit card terminals use GPRS or 3G technology to connect to a mobile network. These types of card readers are typically used in restaurants, for example, as well as mobile merchants. Again, these mobile card machines are not the same thing as the new generation of mobile credit card processing systems that use a smartphone or tablet.

The need for a data connection is one of the reasons for the higher costs of these older systems and is one of the key differences between the new era represented by iZettle and SumUp, since they utilise the shared data connection of the smartphone and an app, meaning they do not require their own communication system and complicated software.

Given the higher cost and complexity of many of these traditional card terminal systems, several companies provide a variety of services such as credit card machine rental services both with short term and long term contracts. However this is not always a suitable or practical solution for small start-ups or small businesses.

New age of mobile credit card readers: simple and flexible

In conclusion, the answer to the question for small business owners as to how to take credit card payments from customers in person is simple.

Once you have acquired the card reader you can more or less immediately start taking payments making it affordable, especially for businesses with low transaction volume.