No business is too small to keep up with the times, and one way for small companies and entrepreneurs to compete — especially in the retail, service, restaurant, or professional space — is to get on board with popular tech that eliminates the barriers between you and your customers. Small companies benefit from supporting nimble credit card payment methods, which operate via Wi-Fi or mobile data, to accommodate the increasing number of customers who do not carry cash. While a traditional credit card set-up can be expensive, mobile card readers that operate with minimal hardware and software can keep credit overhead to a minimum.
Mobile point-of-sale systems (mPOS) can be used anywhere and function independently of elaborate merchant services. A POS system runs on your mobile device using software to process transactions, just like a traditional POS terminal. A mobile card reader serves as the electronic link connecting merchants with an mPOS system that’s designed to allow a simple swipe or tap to accept credit and debit card payments for purchases. Small companies have a choice of reasonably priced mobile card readers — some even come free — that they can purchase outright or pay for through monthly plans. These devices connect with mobile apps on the back end to provide extensive merchant and customer services. Beware of plans that emphasize per-transaction fees: They can get expensive — especially if your business hosts numerous inexpensive transactions.
From the outset, make sure your business and your credit card reader are equipped to handle chip cards and mobile wallets, as well as older magnetic stripe credit cards, by purchasing an advanced device that can accept EMV (chip card) and NFC (contactless) payments.
EMV chip cards: Staying up to date doesn’t only mean the easiest and cheapest solution — it means the solution that’s going to help your customers buy your product or service in the most convenient and secure hassle-free way. The EMV chip card, developed and managed by American Express, Discover, JCB, Mastercard, UnionPay, and Visa is more secure than the older magnetic stripe swipe technology because they use new encryption for every sale. Upgrading to an EMV chip card reader is necessary because if there is in-store fraud, merchants — not credit card companies — are now liable for the theft if they do not have a chip enabled reader available.
Mobile wallets: Not only are people leaving their cash at home, they’re leaving their wallets there too. Customers are increasingly using their smartphones for retail transactions with built-in mobile wallet software linked to their credit cards. Mobile wallets use NFC (Near Field Communications) technology that allows wireless (contactless) payments between smartphones and card readers. NFC payments are extremely swift and secure and do not involve credit cards, since credit information is embedded in the customer’s mobile wallet. These contactless systems include primarily Apple Pay, Google Pay, and Samsung Pay.
Here are some of the best mobile credit card readers for small businesses:
Square is one of the most popular, versatile, and user-friendly mobile credit card readers on the market. While it may not be the absolute cheapest to use, it is easy to understand and set up, affording small companies the flexibility to add other hardware services if needed. Square accepts all major credit cards and works on iPhone, iPad, and Android mobile devices via its free companion point-of-sale app for iOS and Android. When you set up an account with Square you get a free Magstripe card reader.
Merchants pay a 2.75% flat fee for all swiped credit card transactions with no extra costs. Entering transactions by hand costs 3.5% plus $0.15 per transaction. An offline mode lets you pay the same flat processing fee as swipes, in case of a power outage. The mobile POS service app helps with inventory management, facilitates multiple user access, and features personalized email receipts, a tipping interface for retail and service businesses, and more. To accept chip card payments and contactless payments like Apple Pay or Google Pay, you can purchase the $49 reader outright or pay three monthly $17 installments for the Bluetooth-enabled, battery-powered device. A dock costs $29. Square promises to deliver your funds within one to two business days.
PayPal Here is designed for businesses that accept credit card transactions at a variety of venues such as events, retail spaces, or even offices. PayPal is offering its Chip and Swipe card reader, normally $24.99, for free until the end of 2019. A starter mobile card reader is available free for low-volume businesses. But the best value is purchasing PayPal’s Chip and Tap + Charging Stand for $79.99. That way, you never miss a sale no matter how the customer wants to pay. PayPal recommends it for retail, restaurants, over-the-counter, and vendors with a high volume.
PayPal’s transaction fees are a flat 2.7%, with no subscription or other hidden fees — lower than Square’s 2.75%. Key-ins are 3.5% plus $0.15, and invoices cost 2.9% plus $0.30. The reader and mPOS system integrate with PayPal’s merchant services, making it easy to accept in-person and online payments from anywhere. Customers can pay with their credit card or PayPal account. In conjunction with its iOS or Android apps, PayPal Here also lets you customize your profile and receipts, track sales, create invoices, manage inventory, add multiple users, and access an assortment of online resources.
Shopify’s platform lets retailers sell their products both online and in-person thanks to a combination of its online store, mobile app for iOS and Android, and card reader. Sellers can use Shopify for occasional in-person booths or kiosks, and card readers support all major credit cards. Shopify’s basic POS service costs $29 per month, which features access to two users, retail reports, shipping labels, a free swipe card reader, and other services. In-person transactions on the basic plan costs vendors 2.7% while online rates start at 2.9% plus $0.30 per transaction. This arrangement works nicely for small companies that only do occasional in-person sales, such as at events.
More advanced plans offer better discounts. The $79 per month plan has in-person fees at 2.5% and online credit card rates of 2.6% plus $0.30 per transaction, which may be advantageous for those planning a physical expansion from an online-only venue. Tap and Chip card readers are $49, a dock for that reader is $39, and a chip and swipe reader is $29.
Payanywhere is a simple, no-nonsense system that provides next-day funding alongside a free PayAnywhere credit card reader with no monthly subscription fees. Payanywhere’s basic package costs 2.69% per transaction, though custom plans are available for high volume vendors. Hand keyed transactions, invoicing, and recurring payments are 3.49% plus $0.19 per transaction with an inactivity fee of $3.99 per month for merchants who do not use the service for a year.
Payanywhere’s 2-in-1 reader is free (a second unit costs $29.95) and accepts EMV chip and magstripe cards while the 3-in-1 reader that accepts EMV chip cards, magstripe cards, and NFC contactless payments like Apple Pay and Samsung Pay is $49.95. Both pair with iOS or Android smartphones and tablets and desktop computers. Payanywhere even offers an SDK so you can adapt payments in your company’s own proprietary app, if you have one. The Payanywhere app’s mPOS services also include receipts, inventory reporting, customer purchase reporting, invoicing, and can even sync your Payanywhere transactions to an Intuit QuickBooks Online account.
Users of Intuit QuickBooks software can link mobile payments to their current accounting system via a credit card reader and the QuickBooks GoPayment app for Android and iOS. You can choose to pay for this service per transaction with no monthly fee or pay a monthly fee of $19.95 with a lower per swipe rate. Pay as you go rates are 2.4% per swipe or 3.4% per key in plus $0.25 per transaction. The monthly rate brings transaction costs down to 1.6% and 3.2% respectively plus $0.25 per swipe. The benefits of either depend entirely on merchant price per unit and volume. Invoices are 2.9% plus $0.25 and ACH bank transfers are 1% for a maximum of $10.
The overall advantage to GoPayment is its integration with QuickBooks: Payments get recorded directly into QuickBooks Online and synced in real time, though merchants do not have to be QuickBooks customers to use this system. However, because many small companies do use QuickBooks to manage payroll, inventory, and sales, integrating a mobile payment system within the overall accounting structure is convenient. GoPayment can accept and track payments through the mobile app while QuickBooks covers desktop users in accepting online payments via your website. GoPayment says transactions are posted to your account the day after payments are made and are automatically recorded and synced with QuickBooks. A QuickBooks All-in-One Card Reader costs $49 and accepts Apple Pay, Google Pay, Samsung Pay, EMV chip and magstripe debit and credit cards and includes a docking station. It connects wirelessly to your phone or tablet via Bluetooth in the QuickBooks GoPayment app.
If you have a small business or startup operation where you interact with the public to sell products and services, you’ll benefit from having a user-friendly card reader and app ready to go. If your company is low volume and only attends targeted events, a pay-as-you-go option works the best. Higher volume operations may be better served by a subscription that lowers per-transaction fees or something that’s expandable or linked to your back end accounting system. Whatever you choose, it’s best to spend the money for both a chip card and contactless payment system, because that covers where your customers are right now and where they’re increasingly going to be in the future.
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