How To Accept Credit Card Payments On Your Phone
A mobile credit card reader is a plug-in or peripheral device that allows merchants to accept credit card payments on their phones. Read this guide to learn more about mobile point of sale options.
The best credit card processing companies enable small businesses to accept credit card payments on their phones. However, there are a few different ways to accept credit cards using a phone, including mobile card readers, virtual terminals, QR codes, and payment links.
This guide walks you through how to accept credit card payments on your phone, including a breakdown of mobile card reader options and step-by-step instructions on how to get started.
Table of Contents
Can I Accept Credit Cards With My Phone?
Yes, businesses can accept credit card payments with phones compatible with mobile credit card readers or payment processing apps. This payment acceptance method is referred to as a mobile POS.
The best mobile POS systems also accept credit card payments on mobile phones without a credit card reader through the use of payment links, QR codes, or virtual terminals.
How Do Mobile Credit Card Readers Work?
|Type Of Credit Card Reader
|How It Works
|Reads code from a swiped card’s magnetic stripe; Least secure option
|Reads payment information from the square chip embedded in a card; Card inserted into the reader
|Payment data transmitted at close range; Contactless payments via smartphone or tap-enabled cards
A mobile credit card reader is a plug-in or Bluetooth-enabled device that allows merchants to accept credit card payments on their phones.
The best credit card readers will incorporate two, or even all three transaction types: magstripe, EMV chip, and Near Field Communication (NFC) transactions.
Here’s a look at the types of mobile credit card readers and how they work.
How To Accept Credit Card Payments Using Your Phone
To accept credit card payments on your phone, you’ll need to choose which payment acceptance method you’ll be using, sign up with a processor, and go through an app onboarding process. Here’s how to accept payments on a mobile phone:
1. Determine Which Transaction Method You’ll Be Using
|Mobile Credit Card Payment Acceptance Method
|How It Works
|Mobile Credit Card Readers
|A small device that can read swiped cards is plugged into the phone’s headphone jack or charging port. Compatibility varies.
|Scannable 2D barcode generated. Customers are prompted to input their card details. Businesses can scan customer QR codes to access card details.
|A payment link is generated for a specific transaction that prompts customers to input their card details.
|Backup to POS hardware that requires the manual entry of credit card details. Slow and relatively insecure.
As there are multiple ways to accept credit card payments using a phone, you’ll need to determine which method will be best for your business.
Some apps offer several options for processing a credit card transaction, so you may not need to choose just one.
2. Open An Account With A Payment Processor
If you want to start processing payments with your mobile device, you’ll need an account with a payment processor. This can be a full, individualized merchant account or an account through a third-party processor.
When choosing a payment processor, you’ll need to ensure that their hardware and software are compatible with the mobile device you are planning on using to accept card payments.
Generally, credit card readers are only available for use by established businesses or nonprofits, so you’ll need to have relevant information (such as your business’s EIN) on hand if you’re signing up for the first time.
3. Open Your Mobile POS App On Your Device
Most mobile POS services utilize an app or web app to process transactions. Make sure it’s opened, and you’re logged in.
If you’re signing up with these services for the first time, you’ll need to create an account and go through the setup process.
Each app’s setup process will be a little different, but they should allow you some customization, such as tips, receipts, and customer loyalty program signups.
4. Secure Your Mobile Payment Acceptance Process
Logging in with your password is just one security measure you should take when accepting credit card payments with your phone.
Adding extra layers of security, such as biometric locks, alphanumeric passwords, one-time passcodes, hardware keys, and other multi-factor authentication options, is always a good idea.
Customers may also need to approve their transactions, so be sure to include options for collecting signatures or PIN entries.
5. Process The Transaction
- If You Have A Card Reader: Swipe, dip, or tap the customer’s presented card or device (if they’re using a digital wallet).
- If You Are Using A Virtual Terminal: Enter the customer’s credit card information into the corresponding fields in your app.
- If You Are Using A Payment Link Or QR Code: Send the payment link to your customer or present your app’s QR code to be scanned by the customer.
6. Advertise Your Card Acceptance
If your business operates in a field that is typically limited to cash payments, accepting card payments via phone is a great way to beat out your competition just by offering customers a more convenient way to pay.
So, be sure to put up signs that alert your customers to your business’s new payment options.
Accepting Credit Card Payments On Phone: The Bottom Line
Accepting credit card payments on your phone can benefit both your business and customers, but it’s essential to decide which payment processing company and mPOS works best for your business.
Fortunately, many processors offer free mobile card readers, so you can keep hardware costs down.
Additionally, some providers have no monthly fees, no payment processing minimums, and won’t subject you to extensive underwriting. Furthermore, even large, established businesses doing a high volume of sales can implement mobile POS systems that will scale with them, affording more flexibility and mobility.
In short, accepting credit card payments with your phone is usually a good move that won’t break the bank, but will likely draw in customers.