How To Accept Credit Card Payments On Your Phone: The Complete Guide

Mobile credit card processing has been on the rise for some time now. With companies such as Square Payments taking the lead in North America, the use of mobile point of sale (mPOS) technology was already on the ascent. Then, COVID-19 arrived, further accelerating the trend and need for credit card readers that only need a cellphone.

It has quickly become the norm across the US to have your coffee/sandwich/cocktail order taken at the door (or window) of a place of business by an employee with a mobile credit card reader. If you’re reading this, you’re probably looking to accept credit cards on your phone or perhaps your tablet as well. So where do you start, and how do you decide which software/payment processor to choose?

Note, we’re not including iPad POS systems in this post, as they don’t work on smartphones and tend to be designed more for countertop register setups than for mobile use.

If that’s what you’re looking for, we recommend checking out our iPad POS reviews.

Why Accept Mobile Credit Card Payments?

Accepting credit card payments on a mobile device allows merchants to repurpose a common piece of hardware into a payment terminal without the need to buy expensive hardware. Further, these devices are easy to move around should you need to conduct business away from your typical POS installations. This can be particularly useful if you don’t want to handle cash.

How Accepting Credit Cards On Your Mobile Device Makes Business Run Better

Let’s take a closer look at how a mobile payment device can add value to your operations.

Artists & Craft Businesses

Do you sell your wares at conventions, art shows, and other pop-up events? You could be an artist, an author, a quilter/seamstress, or a jewelry maker, just to name a few. If you rely on local events rather than a storefront to sell your wares, a mobile POS system designed for low-volume businesses with no monthly fee is ideal for your business because it means you don’t need to pay for the software when you aren’t using it. You probably won’t need a lot of advanced features, but keep in mind that you can get pretty solid inventory management on a mobile system.

Direct Sales

If you’re in direct sales — that is,  if you are an independent consultant who sells makeup products, clothing, candles, kitchen products, and the like — you almost certainly rely heavily on parties to hawk your wares, in addition to selling online or at pop-up events. Instead of trusting your customers to bring cash or having to wait and hope checks will clear, the ability to accept credit card payments with your phone on the spot can help ensure you get those last-minute impulse buys. A mobile POS with intermediate to advanced inventory, discounting, and flexible tax settings will make a world of difference.

Food Trucks & Farmers Markets

Having a small POS system is a must in a cramped food truck.

Whether you want a tablet stand with a small footprint or you opt just for a smartphone and mobile reader, the point is that a mobile system is undoubtedly the right choice. Being able to send digital receipts (SMS or email) means you don’t have to bother with a receipt printer taking up space — and you don’t have to worry about connecting it to the internet either.

Restaurants & Retailers

Even established restaurants have adopted mPOS apps. A handheld device with the entire menu loaded on it can make taking orders more reliable, especially if, for example, the POS prompts you to input preferences for sides and toppings rather than assuming the default. Even casual restaurants where you might place an order at the counter are using mobile devices, with roaming servers who can stop by a table and place additional orders rather than requiring customers to get up and go back to the counter.

And there’s another big advantage to having card readers mobile and available to use on phones: the ability to process credit cards right at the table. Some restaurant-focused mobile POS systems now have a feature that lets tablets function as self-service kiosks where customers can place their orders and pay their checks at the table without a server present.

What Is A Mobile Credit Card Reader?

A mobile credit card reader is a plug-in or peripheral device that allows merchants to accept credit card payments on their phones. There are three general types of credit card readers for mobile phones, though many models will incorporate two, or even all three of the following transaction methods.

Where Do You Get A Mobile Card Reader?

There are two main ways to get a mobile card reader:

• Through a third-party processor. You can get an inexpensive card reader sent to you upon signing up with a processor such as Square or PayPal. In fact, you may be able to get one for free as part of a promotional offer. This is probably the easiest route to take for merchants just launching their business.
• Through your existing merchant account provider. Established businesses find that the easiest route to using a mobile card reader is to add a mobile app to their existing setup by contacting their merchant account provider and inquiring about their options. With a merchant account, you’re more likely to encounter software, subscription, and/or service fees every month.

Check out our Best Credit Card Readers For Small Businesses feature for a look at card reader models.

How To Accept Credit Card Payments Using Your Phone

Here’s how to accept payments on a mobile phone:

1. Open an account with a payment processor and get a mobile card reader.
2. Open your mobile POS app on your device.
3. Connect your device to your reader or use a payment link or QR code
4. Swipe, dip, or tap the customer’s presented card or device.
5. The customer leaves optional tips and opts in or out of digital receipts.

Open An Account With A Payment Processor And Get A Mobile Card Reader

There’s no way around it: if you want to accept credit card payments on your mobile device, you’ll need an account with a payment processor. We touched on how to get a mobile reader above. While it is possible to process a payment without a reader by keying it in, most payment processors charge higher rates for this method.

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.

Connect Your Device To Your Reader Or Use A Payment Link Or QR Code

Your card reader will need to be synced up to your device in order to accept the transaction. You probably also want to make sure you’re connected to the internet, although many apps are able to process in “offline mode” in a pinch. Alternatively, you can bypass the need for a reader by using payment links or QR codes. These will process the payment as a card-not-present transaction, which is generally more costly. If you take this route, you can skip the next step.

Swipe, Dip, Or Tap The Customer’s Presented Card Or Device

This is where the magic happens. If all goes well, your reader should capture the customer’s payment information and process the transaction.

The Customer Leaves Optional Tips And Opts In Or Out Of Digital Receipts

If applicable, the customer can leave a tip and select how they’d like to receive their receipt, if at all. The customer may also need to sign for the transaction using the touch screen.

Accepting Credit Card Payments On Phone: The Bottom Line

Who wants to deal with paper checks these days? If your business has you on the go with any frequency, an mPOS app and mobile card reader offer significant benefits. For small businesses that are just starting and may not be pulling in large volumes, 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 can implement mobile POS systems that will scale with them, affording both more flexibility and more mobility.

For more on choosing the right smartphone-friendly mPOS option for your business, check out the following resources!

• 5 Best Mobile POS Apps
• How Do You Find The Best Credit Card Reader For Small Business? Try These 7 Options
• Mobile Processing Comparison Chart
• A Cashless Future Is Coming. Is Your Small Business Ready?

Go through our comprehensive payment processing guide to learn the nuances of the industry and get your business up and running.

Have questions about how to take credit card payments on your phone? Want to know more about how to accept mobile credit card payments? Drop us a comment and let us know.

FAQ: How To Accept Mobile Payments On Your Phone