Every company can benefit from having mobile credit card readers, whether you provide goods or services, or whether you have a brick and mortar or are a mobile business. This type of reader will let you easily accept credit card payments from clients wherever you are, so you can get paid faster. Not only will a convenient payment process help you get paid faster, but clients will be more likely to choose your company if they can pay with ease, which means you’ll also get paid more. Simply put, having a mobile credit card reader gives your customers a better experience and lets you close more sales.
There are various mobile credit card readers for small businesses available, including several convenient payment options from Podium. Before you choose which one will be best for your business, however, let’s go over a brief history of mobile payment devices, what options exist today, and how they work.
When did mobile card readers become popular?
To give you a better idea of how mobile credit card readers became popular, you need to understand a brief history of credit card processing.
In the very early days, stores that wanted to accept credit cards had to manually enter a card’s information—this was a pretty time-consuming way to collect payments. The invention of the first plastic card from American Express in 1959 changed this and led to the credit card imprinter. This device transferred the information from the card onto carbon paper, which sped up transactions.
The first magnetic stripes on credit cards arrived in 1970. Also known as the magstripe, it contained all relevant payment information, such as the card number, authorization code, expiry date, and cardholder name. The first authorization system for electronic transactions was created in the US in 1973, but these systems didn’t spread until the 1980s.
Chip and PIN cards were first created in 1975 but took a long time to reach adoption outside of France. The UK introduced them in 2004, but they didn’t appear in the U.S. until 11 years later in 2015.
Visa introduced the first electronic card reader in 1979, and while it was revolutionary at the time, it was incredibly bulky by today’s standards. These systems required landline connections.
The small wireless terminals we use today didn’t arrive until much more recently. These were a result of the rise of mobile phones and the resulting wireless networks.
Currently, the most popular solution is to turn smartphones into credit card readers with the help of an application and a swipe reader that plugs into the phone. Square was arguably the first company to launch this type of reader in 2010.
Apple recently announced that iPhones will soon have the ability to accept contactless payments without any additional hardware, bypassing the need for card readers. Although this will make it easier than ever to take payment, you may still want to keep a wireless reader around in case the customer’s card is having issues with the contactless tech and you need to swipe or dip the card.
What are mobile card readers?
A mobile card reader is exactly what it sounds like—a payment processing solution that lets you process credit cards on the go. Mobile credit card readers are especially important for companies that provide services in customers’ homes, operate outside of a physical location, or make deliveries to their customers. They are also useful for companies who frequently set up booths at fairs or expos, or mobile businesses like food trucks.
Some of the biggest names you’ll see when looking for a mobile credit card reader include Square and Shopify, but there are tons of other options as well.
All of the options produced by industry leaders have their pros and cons. Square, for example, is known for being easy to use but also for charging a higher transaction processing fee. Shopify is particularly helpful for companies that already use Shopify for an online store. Podium has similar features but a more affordable monthly fee.
How do mobile card readers work?
Because they have to be small and easy to transport, mobile credit card readers typically don’t have any screens or buttons other than a pairing button or on-of switch. They usually connect to your phone via Bluetooth, but some of them can also plug directly into your phone.
Typically, an app on your phone will act as the user interface. You simply enter in the amount to charge on the app, then the app prompts you when it’s time to insert or tap the card. Modern readers have the ability to tap or insert a card, and some of them even accept mobile wallets such as Apple Pay or Samsung Pay.
Because mobile readers are small and have limited hardware, they typically don’t print receipts. Instead, the corresponding app will give the ability to text or email receipts to customers.
Mobile card readers give you more opportunities to sell
While you might not always need a mobile card reader, they certainly serve a purpose. The obvious benefit is that mobile card readers allow you to take payments from anywhere—this gives you more opportunities to sell even just within your brick-and-mortar business. For example, with a mobile card reader, you could check someone out on the sales floor rather than relocating to a checkout desk. You could also throw an event where you mingle with a large group of clients and take payments as you socialize. Mobile card readers make it possible to do business in an innovative way.
Mobile card readers come in a variety of shapes and sizes, and certain types might work better for you depending on your needs. Let’s take a look at some of the card reader options available to you.
Types of mobile credit card readers
Mobile credit card readers are incredibly useful for nearly every business. They let you process credit cards from almost anywhere, which is convenient for both you and your customers. There are three main types of mobile credit card readers:
- Small mobile readers that pair to your phone
- Handheld card readers with a screen
- Stationary point-of-sale systems for checkout counters
Let’s take a closer look at how each of these three options works.
Small readers that pair to your phone
The benefit of a mobile reader that pairs with your phone is that you can accept payments anywhere your phone goes. Whether you’re in an office, traveling from house to house, or at an expo booth, as long as you have your phone, you’re ready to start selling. Another advantage to this type of card reader is that setup is fairly minimal. Simply use Bluetooth to pair your payment device to your phone, and you’re in business.
Mid-sized handheld reader
Mid-sized handheld readers are a good compromise between the three main types of readers. They’re a bit bigger than small readers that pair to a smartphone, but they’re smaller than bulky stationary readers. They typically have their own touchscreen, so they’re a standalone system and don’t require any paired devices.
These kinds of mobile payment devices can be taken just about anywhere and accept all payment types. Another benefit to a handheld reader is that it can double as a stationary reader at a checkout stand or front desk for days when you aren’t on the move.
In-store readers are the bulkier options that you’ll usually find at a front desk in brick-and-mortar stores for in-person transactions. These card readers are not necessarily designed to be mobile, (although there are options for a portable credit card reader that is also appropriate for in-store use).
Some in-store card readers will need to connect to your internet via an ethernet cable or even to your landline. However, many can use the same wireless connection that mobile credit card readers use.
The advantage of a bulkier credit card reader is that the bigger size means more robust hardware, which often allows for more features. You also don’t have to worry about keeping this kind of reader charged. Most of them also either integrate with or include your POS system. The limitation is that bulky point-of-sale stations are not portable.
Some companies offer a free card reader as part of your monthly subscription fees, so if you’re not sure which reader is right for you, check if there are any options available to you through companies you already work with. Just be sure to read the fine print on these offers, as there may be higher transaction fees or monthly processing minimums.
Mobile card reader alternative: text-to-pay
One of the newer alternatives to mobile credit card readers is text-to-pay. This is a simple process where you text a customer a link, they click on the link, and it takes them to your secure payment portal where they can pay using their preferred method. This supports credit cards with ease.
While these are designed for mobile payments when the customer is not present, they also work for in-person sales. In fact, they can be an alternative to NFC contactless payments when small businesses want to accept contactless payments for sanitary reasons.
Text-to-pay is incredibly popular due to its convenience—you don’t have to be in the same location as a customer in order to accept a payment. Customers can pay for a product or service from the comfort of their homes. This takes contactless payments to the next level.
The only caveat to keep in mind is that this will count as a card-not-present transaction, which likely comes with slightly higher fees to process payments than a card-present transaction. However, the convenience of being able to accept credit cards for transactions regardless of a customer’s location makes those fees worth it. The potential increase in business due to the ease of this kind of payment will likely make up for the slightly higher fees.
Why are mobile card readers important for local businesses?
Simply put, using mobile credit card readers lets your small business accept more payment methods in more places. This will help you attract more customers. Getting a credit card swiper for your store and investing in a text-to-pay system lets you accept in-person payments as well as payments when your customer isn’t present.
Podium supports all of the above types of transactions with its card readers and payment features. With Podium, you can manage all of your transactions in a single platform while offering customers the choice to pay with their preferred method, whether that is by credit card, Google Pay, or something else. A good payment experience is the cherry on top of great customer service, and your customers will thank you for it.