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October 20, 2021

How to Accept Credit Card Payments on your Phone | Mobile Payment Tips

Merrell Sheehan

Written by:

Merrell Sheehan

How to Accept Credit Card Payments on your Phone | Mobile Payment Tips

Why its Essential for Businesses to Accept Credit Cards

The use of smartphones is taking center stage in our everyday lives. And with customers using cashless often, business owners are feeling the need to stay up to date with different payment methods.

Key Takeaways You Will Get From This Article

1. With mobile processing, a business can accept credit card payments anywhere.

2. A mobile credit card reader is a point of sales system with a peripheral device that allows merchants to accept card payments on their phones

3. Customers paying with credit cards expect a high level of security with their transactions. To accept credit cards, businesses must go through PCI compliance. 

4. Mobile credit card payments are a worthy investment as more consumers are choosing to pay this way. 

So it is not a wonder that many are interested in processing credit card payments on smartphones, especially if your business serves customers not in a permanent location. 

Read on as we discuss how you can accept mobile credit card payments on your phone and how to choose the right payment processor.

Table of Contents

  1. How does accepting credit card payments on your phone affect your business?
  2. What type of business benefits from a mobile Credit Card Reader?
  3. What is a mobile credit card reader?
  4. How secure are credit card payments?
  5. Types of Connections for Mobile Card Payment Readers
  6. Process of accepting payments on your mobile phone
  7. Accepting credit cards to grow your business

How Does Accepting Credit Card Payments On Your Phone Affect Your Business?

As we begin to discuss this payment option in detail, it is worth noting that mobile card processing is not new in the United States. The use of mobile point-of-sale technology has been steadily on the rise. 

Cash usage has already been on a steady decline with credit and debit card transactions increasing.   

However, when the COVID-19 pandemic came into the picture, it accelerated the need for credit card readers that could be used with mobile phones as many products are now being delivered to clients' homes and businesses.  Service industries that don't have a physical shop or store can now accept payments on the job location with this virtual terminal.  

Consequently, accepting a credit card payment on your phone can help your business run better by offering more payment options to customers.  

If you'd like more information specifically on this, we have created a beginner's guide on mobile payment acceptance.

What type of business benefits from a mobile Credit Card Reader?

Many businesses that did not traditionally accept cash will quickly learn the benefit of accepting virtual payments. People are carrying less cash, and when they do, are only able to spend what they have physically on them. 

With mobile processing, a business can accept credit cards anywhere. Examples of businesses that benefit are ones in the service industry, such as landscaping, as they can accept customer payments on the job. Have a food truck? Accept cards at events! Sell crafts?

Accept payment at a craft show. You can keep your revenue flowing by accepting payment on the spot!


What is a Mobile Credit Card Reader?accepting credit cards for your business

A mobile credit card reader is a point of sales system with a peripheral device that allows merchants to accept card payments on their phones. Below, we discuss the types of credit card readers that can be used on your mobile phone.

Of course, as a business, you can incorporate more than one of these card transaction methods to process mobile credit card payments.  Many businesses have different payment processing options for in-person payments and online payments.

Credit Card Swipers

Credit cards were originally designed for payment using a credit card swiper. They use Magstripe technology to accept magnetic stripe payments.

While these machines are small and portable, they are quickly becoming obsolete in the market, as they are the least secure type of mobile card reader in the market.

What makes the card swiper even less popular is that the current regulations charge merchants for loss on a purchase if a client uses a fraudulent card with a chip and magnetic stripe. As a result, they resort to using EMV readers as these usually shift blame back to card companies.

EMV Card Readers

EMV card readers are alternatively known as chip card readers. This system stores payment information digitally on a chip embedded in the card.

This type of reader is safe against fraud compared to a magstripe. The reason why EMV was developed was to fix the problem with the magstripe. With an EMV reader, you can accept payments from chip cards with less worry about chargebacks.

NFC Readers

NFC is an acronym for Near Field Communication. Therefore, his type of reader supports wireless payment. As a wireless payment technology, this payment can help transmit payment information at a close range.

People with smartphones use mobile wallet payment apps, including Google Pay to transmit mobile payments or payments from NFC-enabled cards. Just like EMV technology, this system of payment is highly secure. However, it is not as widely used as the former two technologies described above.

Therefore, any business that intends to accept NFC payments should pair this up with another method of receiving mobile payments. You can also consider a mobile card reader that accepts both magstripe and EMV payments if you are looking for alternatives.

How secure are Credit Card Payments?

Customers paying with credit cards expect a high level of security with their transactions.   To accept credit cards, businesses must go through PCI compliance. 

The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that ALL companies that process, store, or transmit credit card information maintain a secure environment.

Types of Connections for Mobile Card Payment Readers

The first magstripe card reader by Square Virtual Terminal was connected to a device using a headphone device. Today, it is still possible to use a headphone jack to connect the device to your mobile phone. However, there are other connection types.

For instance, you can connect a device via Bluetooth or a lightning connector. While all these methods are equally efficient, headphone jack connections may soon die out as some models of phones such as the Samsung Note and the more recent iPhones lack headphone jacks. Furthermore, with Bluetooth wireless connections, you can worry less about wires.

On the other hand, if you use lightning connectors and Bluetooth, you may have to face the inconvenience of used up battery life.

Process of Accepting Credit Card Payments on Your Phone

To understand how you can start accepting credit card payments on your phone, you need to understand the major players in the field and the process you need to follow. We outline them below:

  • Own a Business

While you are likely reading when you already own a business, which may be obvious, many mobile credit card providers will only accept business owners. So whether you run a restaurant or boutique, you can get approved for mobile credit card readers.

  • Have a Mobile Device

Again, this may also seem rather obvious; you must have a compatible mobile device. Thankfully, from an Android device to Blackberry and iOS, they can all accept credit card payments. Therefore, it is likely that your phone will already be equipped to accept credit card payments, and there will be no need to carry additional hardware. However, be sure to check if your device will accept both credit and debit cards, as some customers may want to pay with a debit card.

  • Choose a Mobile Credit Card Processing Company

The first two steps we have talked about are quite simple. However, choosing the right credit card processing company can be pretty difficult. You will have to factor in compatibility, pricing, a fast and uncomplicated application process, and high approval rates for businesses. Pricing needs to factor in all credit card processing fees, startup costs, monthly fees, and transaction fees.

Keeping your customer's data safe and understanding security measures should be considered when choosing.  Look for a company that has enhanced security features and is a certified level 1 PCI provider.

  • Secure Your Device

While you may stop at finding the right mobile credit card processing company, you need to consider the security of your device. Furthermore, you need to ensure that your customers' data is always safe, as any theft could compromise your brand reputation.

You also need to ensure that you have installed the latest updates of your phone's operating system. Ensure that you install apps from trusted sources such as Apple Store, Blackberry World, or Windows Phone Store, as these are the most secure places on the internet.

Ensure you secure the device with a password or PIN and constantly keep an eye on it, especially during business hours. Then, even if your device is stolen or gets lost, you can rest assured that your data is safe.

  • Set-Up

Once you receive the reader from the mobile processing company, you may need to download a corresponding app to your mobile device and set it up to receive payments from customers and transfer to your bank. Be sure to test it before taking it to major events, so you don't lose out on sales.

Accepting Credit Cards to Grow your Business

Mobile credit card payments are a worthy investment as more consumers are choosing to pay this way. 

No matter what your business situation is, having easy payment options can help increase your cash flow and increase customer satisfaction is a great benefit for businesses. You should find the right mobile credit card processor for your business.

Consider the pricing, fees, and sign-up process to ensure that you will get the best from the company you choose.

Electronic Merchant Systems is a leading provider of payment processing and merchant services. We offer a full suite of credit card processing solutions designed to help business owners boost profits and streamline operations. 

To learn more about how we can help you start accepting contactless payments, contact us today.

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