Ask Deemable Tech: Accepting Credit Card Payments Using Your Smartphone
Norman asked, "I'm looking at opening a food truck. I've seen other food trucks and hot dogs stands taking credit cards on their phones. How can I do that? What kind of phone do I have to have, and does it cost a lot of money?"
Smartphones have opened up a whole new way for mobile vendors to accept credit card payments. Gone are the days of having to use one of those bulky carbon copy imprinters with hefty fees, high transactions costs and no way to prove if the credit card you were charging was even a real credit card.
You have a few different options that you can choose from, Norman, but the three most popular are Square, PayPal Here and Intuit GoPayment. All three are small devices that plug into the headphone jack of your iPhone or Android phone.
Square pioneered mobile credit card processing with their small, square (hence the name) credit card readers. Once you get your Square reader and download and install the free Square Register app, you’ll be ready to start accepting credit cards. You can even add your entire inventory to the app, and use it as your point of sale terminal right there on your phone. Transactions you ring up before 5 p.m. are credited to your bank account the following business day. Square charges 2.75% per transaction.
PayPal, the company that pioneered online credit card transactions, entered the mobile game a bit later than Square with their credit card reader, a blue triangle known as the PayPal Here. PayPal Here also offers a point of sale app to go along with the device. Money from real world transactions made using this device is sent directly to your PayPal account. From there the money can be spent online or transferred to your bank account. PayPal Here charges 2.7% per swipe.
Intuit, the company that makes Quicken account software, makes the Intuit GoPayment card reader and app. It’s about the same shape as a roll of quarters, but a bit shorter. While the GoPayment is physical the biggest one we’ve seen, it charges less per transaction than Square or PayPal Here: 2.4% per swipe. The Intuit QuickBooks GoPayment app also integrates with Quicken and many other small business apps.
As the mobile payment industry keeps growing, more and more companies are starting to jump in. Almost all of the traditional credit card processors like BluePay, Verifone and Chase have launched their own smartphone credit card readers. Even office supply retailer Staples has gotten in on the action.
You have a lot of options to choose from, Norman, and you can get just about all of them for free with no contract. Our advice is that you try all of them until you find the one that fits your needs the best.