Whether you are trying to launch a new business or expand your existing operation, it’s critical to have a credit card reader by your side. Apart from helping you accept credit card and debit card payments, this solution also lets you cater to a larger audience segment by providing more payment options. But even when you make up your mind about getting a card reader for your business, choosing between different providers to take credit card payments can be nothing short of a challenge for small business owners.
With various options at your disposal and each one promising better services than the last, selecting a provider can be quite tricky.
With that being said, making an informed decision is not impossible. As long as you know the necessary information about card readers, their functions, and their pricing models, you can easily find something that fits your requirements.
Here is a guide on choosing the best credit card reader for your business.
The Credit Card Reader Process
As you start your journey of finding the ideal card reader for your operations, it’s essential to learn how the solution accepts card transactions in the first place. Simply put, the term “card reader” refers to a device built to accept credit card and debit card payments. With the emergence of new card acceptance methods, modern card readers can process customer’s card informations in more than one way and accept them via applicable mobile devices like those by iOs.
These methods of gathering card information include:
- Card Swiping. This method involves the classic mechanism of swiping a magnetic stripe (magstripe) card through the reader device itself.
- Card Dipping. This process refers to the cardholder inserting a credit card or debit card into the chip reader machine. This method is used with EMV Chip cards, which are more secure than magstripe cards and considered a more modern payment card solution.
- Card Tapping. This mechanism allows the card reader to accept payments by simply tapping a payment card against it. This method is being adopted by different solutions for contactless payments.
- Mobile Payments. This method also uses the tap-to-pay mechanism but with mobile devices. The respective mobile devices need to be NFC-enabled and have to be powered by a payment provider. Common mobile wallets include Apple Pay (which only works on iOS devices like iPhones and iPads), and Google Pay.
Depending upon the type of credit card reader you get, it can either be powered by itself or might need a mobile device to become functional. For mobile credit card readers, you should check that it can support your operating system, whether that’s iOS or Android. Some card readers may also connect to the device via Bluetooth.
Standalone card readers come in different specifications and may or may not have their screen. These devices are often built to be wireless, mainly to offer more convenience and differ from a traditional or countertop point of sale (POS) setup. (POS systems do much more than simply process payments. They’re all-in-one systems that include functionality like inventory management. It should be noted that many systems now offer POS apps to take payments on your mobile devices.) These card readers will need to connect to wi-fi, so it’s crucial to make sure that you have an internet connection wherever you take card transactions in-person.
On the other hand, card readers that connect to a mobile device are often deployed without a screen interface. Instead, they are operated through a corresponding app that is installed on the respective mobile device.
These readers are also designed to be wireless and are not tied to a physical location so you can take payments anywhere in the store or on the go throughout your business day. Usually they are touchscreen and include their own barcode scanner. (Some now scan QR codes, as well.).
Depending on your needs (particularly if you have an eCommerce business), you can easily choose between different credit card reader solutions that cater to your specifications. If you want to operate a card reader that can function independently, going with standalone solutions is a good idea. Suppose you don’t have any qualms about connecting the card reader to your mobile device, then be sure to move forward with such options.
RELATED: List of Best Credit Card Readers
Credit Card Reader: The Parties Involved
A single credit card reader has multiple parties behind its functions. When put together, their services allow the card reader device to accept payment cards without any issues.
This typically includes the following parties.
This refers to the party that manufactures card reader hardware. A manufacturer typically doesn’t have anything to do with ongoing transaction services and only charges for their equipment fee. But there are a few manufacturers that also power transaction solutions and apply the corresponding charges on an ongoing basis.
This is the payment processing network that lets you accept the corresponding payments through the card reader. These payment networks include but are not limited to Visa, MasterCard, AmericanExpress, and Discover.
By default, each payment network accepts its corresponding payment card. But multiple payment methods can easily be integrated into the same card reader hardware.
For instance, with the right solutions, a card reader that accepts Visa credit cards can also accept MasterCard debit cards and vice versa.
Merchant Services Provider
This is the solution that bundles the services of different payment networks and lets you accept their corresponding credit cards and debit cards. When you integrate these solutions into an applicable credit card reader, you can accept any associated payment card with ease.
In turn, you need to pay a service fee to these merchant services providers that come on a per-transaction basis. Some service providers may also charge a monthly subscription fee on top.
Modern card readers (and POS systems) require an internet connection to accept credit card payments. You will need a good internet connection at your retail store. If you’re a mobile business, you will need wi-fi on your device to utilize mobile card readers.Learn More
Comparing Credit Card Reader Companies
Once you understand the essential functions behind a credit card reader, it is time to comprehend how different card reader companies carry out their operations.
In most cases, a company that offers credit card reader services may not be the actual manufacturer of the hardware and could only be sourcing the equipment for its solutions. In other scenarios, the company could be both the manufacturer and the service provider for a particular card reader.
But in both situations, your card reader works the same way. It accepts payment cards according to its specifications and deposits the funds to your merchant account for you to use later.
The main difference between various credit card reader companies comes in the form of cost or transaction fees. The other distinct contrast is visible in terms of its experience, services, and reputation.
Before you select a credit card reader company, you need to check the following aspects:
- Credibility. The company should have a pristine reputation with no scandals in place.
- Features. The provider should offer modern features such as accessibility, ease of use, and an intuitive interface.
- User Reviews. The solution should have positive reviews in place regarding its services. These reviews provide a wealth of information on FAQs, such as the company’s customer support capabilities.
- Pricing. The company should provide you with competitive pricing that isn’t above average market costs.
Credit Card Reader Costs and Service Fees
As mentioned above, different credit card readers come with their specific costs. These charges usually include your setup fee and your ongoing transaction fee. They can also carry additional charges in place.
To give you an idea about possible costs, here are a few standard charges that are associated with credit card readers.
- Hardware Cost. This one-time fee is charged by most card reader providers and comes directly from the manufacturer. The hardware generally includes some combination of a card terminal or reader and receipt printer. Often, if you purchase a POS system, these things will come included in an all-in-one countertop package.
- Equipment Cost. This one-time fee is charged by most card reader providers and comes directly from the manufacturer.
- Setup Cost. This charge may come in addition to the equipment fee. But it is not a common practice.
- Transaction Cost. This per-transaction fee is constant for all card reader companies. No matter the type of solution you select, it always charges you processing fees for each transaction that is processed through its service.
- Subscription Cost. A few providers apply this fee. But it is not always applicable to every card reader.
- Other Assorted One-off or Monthly Fees. Many payment processing solutions charge fees for their service on a monthly basis, such as an invoicing fee. It’s worth reading customer reviews of a solution to determine if you’re likely to discover hidden fees on your bills.
While many credit card reader companies often deliver equipment costs upfront, several of these firms offer their setup, transaction, and subscription pricing upon request.
This makes it tricky for you to choose a solution for your specific requirements. However, by sending requests for quotes and doing a side-by-side comparison of costs afterward, you can see how much a certain provider charges for their services and how they offer fares against the market average. You can then compare this pricing with other factors such as reputation, user reviews, and service features before making a decision.
Stax knows that credit card processing and sale generation is a priority for your business, and we are there to help with anything related to the process. Learn how we can help increase your sales capabilities and process more transactions today. Request a Custom Savings Quote.