How To Accept Credit Card Payments With a Phone

How to Accept Credit Card Payments on a Smartphone

Just five or six years ago, small business owners only had a handful of options for accepting card payments on their smartphone. Mobile credit card processing is now an exploding industry.

Worldwide mobile payment revenue in 2015 hit $450 billion. In 2014, 41% of consumers reported using their phone to pay a merchant in person. That was up from 17% in 2012 — just two years prior.

Today, merchants can easily accept credit card payments anywhere they have cell service with a seemingly endless number of services.

Whether you operate a mobile food business, work as an in-home massage therapist, are a plumber, or operate any other type of small business, you can accept payments on your iPhone or Android smartphone.

If you want to start accepting credit cards on the go, here is what you need to know to get started. We’ll even provide an overview of four of the most popular smartphone card payment solutions.

How to Get ​Started Accepting Payments Via Smartphone

To accept card payments on the go, you will need to download a mobile app and get a card reader.

The card reader is usually a plastic dongle that plugs into the phone.

Square plastic card reader in action

You can also choose an app that allows you to manually key in credit card numbers. Just remember that the transaction fees for these card-not-present transactions are far higher.

What Service to Choose

There are dozens of services that allow you to accept card payments with your phone.

The first this you will want to carefully consider is the fees.

Fees can range a great deal. However, a good benchmark for swiped transaction fees are around 2.7%. If your bank offers its own dongle (like Chase), you may be able to do better than that.

Watch for hidden fees as well. So you will need to take into account monthly charges. Also consider your typical monthly volume as well as the type of transactions you will typically process (swiped versus keyed-in).

Mobile Payments on iPhones and Android Phones

Regardless of what mobile operating system you prefer, you will be able to accept payments on the go with any of these top providers.

Square Register

What you need to know:

  • Works with iOS and Android devices
  • Fees: 2.75% (swiped), 3.50% + $0.15 (key in), or $275 per month flat rate
  • Deposits in 1-2 business days
  • Accept credit and debit cards, cash, gift cards, and checks
  • Other Features: printed and digital receipts; swipe cards without a connection; and real-time inventory management

Square was one of the very first mobile payment solutions. It is now widely accepted in retail locations.

Square Register is a popular service, but a bit expensive. You will pay a flat monthly fee rather than paying per-transaction fees. This can be a good deal if you have regular, large transactions but very expensive if you have a small or irregular volume.

While Square has a higher-than-average fee structure, it doesn’t have hidden fees for minimum sales or customers using reward cards, for example.

Square Register service includes a free card reader that can fit in your pocket.

One of the biggest drawbacks to Square is its lack of professional features, especially the fact that you can’t void or refund transactions from the app. You need to use a Web browser for that.

PayPal Here

Key information about PayPal Here:

  • Compatible with iOS, Android, and Windows devices
  • Fees: 2.7% (swiped), 3.50% + $0.15 (key in), 2.9% + $0.30 (invoice), 1% for cross-border transfers
  • Mobile card reader (first free) or chip card reader ($149 with $100 PayPal rebate after processing $3,000 within 3 months)
  • Funds deposited into your PayPal account within minutes. You can use funds immediately with a PayPal debit card.
  • Other Features: inventory management; send invoices, up to 1,000 user; generate reports; and use phone’s GPS signal to attract nearby buyers

PayPal is the undisputed leader in secure payment processing and PayPal Here is their mobile credit card reader service.

PayPal Here allows you to accept all types credit and debit cards and checks.

If you upgrade to the chip card reader device, you can also accept chip cards, contactless, and Apple Pay. While the chip card reader is expensive, it can save you on transaction fees and fraud reversal costs.

PayPal offers some nice features, including great customer support, the ability to attract buyers who want to use PayPal with your GPS signal, and the ability to use your funds immediately with a PayPal debit card.

If you use PayPal already or have a PayPal ecommerce store, you’ll find it very easy to get started with PayPal now.

Intuit GoPayment

What you need to know to get started:

  • Works with iOS, Android, and Blackberry devices
  • Free/Non-subscription fees: 2.40% + $0.25 (swiped), 3.75% (key in)
  • Fees with Subscription: $12.95/month subscription fee; 1.75% + $0.25 (swiped), 2.75% (key in)
  • Deposits within 2-3 business days

Intuit GoPayment is a popular choice among small business owners as it allows up to 50 users so several people can accept payments.

Intuit GoPayment is very similar to Square. However, one of the biggest differences is Intuit allows larger business to sign up for a monthly subscription for reduced transaction fees.

Intuit’s transaction fees are lower than average, but they’ll hurt if you process a lot of smaller payments.

There’s also an added fee if the customer uses an American Express, Discover, or business rewards card of $0.07 to $0.29 each.

The subscription service gives you a much lower transaction fee; but you will need to process about $3,000 a month for it to be worth the additional cost.

If you already use Intuit QuickBooks, GoPayment is a good choice with easy integration.


The basics on PayAnywhere:

  • Works with iOS, Android, and Blackberry devices
  • Fees: 2.69% (swiped), 3.49% + $0.19 (key in)
  • Next-day funding
  • Free card reader
  • Other Features: unlimited users; detailed reporting; and digital or printed receipts

PayAnywhere offers extensive smartphone support as one of the few mobile card processing apps available on a Blackberry.

PayAnywhere has two services: storefront or mobile. With the mobile service, you get a free card reader and app with a flat 2.69% swiped card fee without monthly charges.

The storefront service includes a free tablet, stand with built-in reader, and app with lower swipe fees but a $12.95 monthly basic service fee.

Pay Anywhere is a good option for most small businesses. However, its basic card reader doesn’t offer as many features as devices from services like Square. To get more features, you will need to pay for the more expensive reader.

Unlike Square or PayPal, the free reader does not accept EMV chips or NFC technology (which powers services like Apple Pay).

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