The Best Free Credit Card Readers For Small Businesses
There’s no such thing as a free lunch.
People like to say that, but if you get a literal lunch for listening to a sales pitch on something you’ve already decided to buy, then that lunch is free. The mobile processing industry, though, typically doesn’t offer free lunches. Instead, they offer free credit card readers. These readers are usually simple swipe card readers or maybe EMV readers if you’re lucky.
Card readers used in mobile processing are typically inexpensive to make, so they are perfect candidates for free giveaways to entice new merchants to sign up. For a small business just getting started, anything free is usually good, especially after looking at the retail price of some of the high-end readers in the market (or even a conventional credit card machine). However, mobile processing isn’t just about the reader. It’s about the suite of services and credit card processing.
So if you are looking for a mobile credit card processing app, don’t make your decision based just on a free reader. Take a look at the app and the extra services provided as well as any upgraded card readers offered by the processor. Compare pricing and features to see if everything truly fits your needs. Even if you do not need any additional services right now, you might need them in the future, so make a plan if you can. Only after you’ve looked at the software and extra features should you take the free card reader into account and make your final decision.
Below, we give an introduction to how these mobile readers work and then talk about some commonly offered free readers. Hopefully, the information will help you make an informed decision for your business.
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What Does A Swipe Card Reader Do?
Most people have used magnetic stripe, or magstripe, card readers before. They’re the readers with a slot that you move a card quickly through. This movement allows the device to read the data from the magnetic stripe on the back of the card.
With mobile processing, quite a few of the free readers are magstripe only readers. You may already have seen some around — little white squares attached to phones, popularized by the third-party processor Square, who gives them out for free. To read payment card information, the reader gets inserted into a headphone jack or a Lightning port of a phone or tablet.
There are some disadvantages to using only a magstripe reader. To understand why lets first look at the technology of magstripe readers.
How Swipe Card Readers Work
Not everyone is hungry to learn the science behind every technology. For instance, you the merchant probably don’t care that the magnetic stripe on a payment card has millions of tiny magnets in it. Or that each magnet is affixed in a north or south pole direction so that they can correspond to a zero or a one to make up a binary code to store data. You probably have no desire to learn that there are three strips of information stored in every magstripe. But so you know, the first and second strips store cardholder data, such as the primary card number, country code, cardholder’s name, and expiration date. The third strip stores an encrypted PIN, the country code, currency unit, and the amount authorized.
What you care about is whether the card reader is connected to your mobile device correctly so that the card information gets sent to your card processor. It doesn’t matter to you that a magstripe reader reads information off a credit card much like an old cassette player reads information from a cassette tape. (That’s about how long we’ve been swiping credit cards if it’s any indication.)
You might care, though, that this means that the credit card information on the magstripe can be easily stolen. Under some circumstances, you might get stuck with the loss on purchases made with that stolen card.
Credit Card Swipers Don’t Protect You From Fraud
Back in 2015, to get merchants to adopt the more secure EMV (Europay, Mastercard, and Visa) technology (i.e., chip on the card), the credit card companies decided to shift some fraud liability onto those merchants who hadn’t adopted the technology.
As of October 1, 2015, if a merchant only has a magstripe reader and a customer presents a stolen or fraudulent card with both a magstripe and a chip, the merchant would be responsible for the loss on the purchase. To shift the liability back to the credit card companies, the merchant need only have an EMV card reader.
Admittedly, if you’re just starting your business and do not expect to take a high volume in credit card sales or if you only sell smaller ticket items, assuming liability for taking a fraudulent card might be a risk you’re willing to take. That’s fine, but we at Merchant Maverick do encourage you to upgrade to an EMV reader sometime in the future for your protection. There’s little reason to delay upgrading because some free card readers in this article are combination EMV and magstripe readers, so you can eliminate the risk at no cost to you.
How Do You Get A Free Credit Card Reader?
A free credit card reader is not very difficult to find. Both merchant account providers and third-party processors will sometimes offer a free card reader to entice you to sign up for their mobile processing service.
We've done in-depth research on each and confidently recommend them.
A lot of third-party processors are also mobile processors. Their primary offering is usually the mobile app and card reader. Sometimes, they make money not only on processing cards but also on other value-added services related to running a business in general, services such as invoicing and payroll processing. (Yeah, we’re looking at you, Square.) Once a merchant signs up, the processor will try to upsell and cross-sell these services to the merchant. It makes sense for some merchants — the centralized management of their business is an advantage.
Since an expensive reader can discourage signup, third-party processors often offer readers for free. They make it very obvious on their website that you can get a free reader. However, keep in mind that these services are designed for small businesses — they don’t expect you to need a lot of equipment. Your first reader might be free, but you will typically have to pay for any additional readers.
As to merchant account providers, they typically work with more established businesses that can afford (sometimes expensive) countertop registers and credit card terminals. It’s pretty rare to see credit card terminals given away for free. When they are, it’s usually only a “rental,” and you’ll have to return the equipment when you leave the processor. However, as mobile processing becomes more and more popular, many merchant account providers are starting to offer mobile processing services as a convenience to their existing customers. With these mobile processing services, the merchant account providers do tend to give away free mobile credit card readers. Sometimes the information is clearly advertised but not always. You might need to contact your payment processor and ask if you’re interested in adding on a mobile POS and card reader.
Let’s be clear: Just because you’ll get something for free doesn’t mean that you should immediately sign up with a particular processor. There are some negative issues you might wish to consider.
Why You Should Be Wary Of Free Credit Card Reader Offers
As already alluded to earlier, free card readers are generally provided as loss leaders — something provided for free or at a drastically reduced cost to bring in a new long-term customer. Often, this means that the reader will be a lower-cost magstripe reader, with no EMV capability. If that is the case, then you might not be able to recover losses from purchases made with cards using stolen credit card numbers. At this late date, there is very little reason to settle for a reader that doesn’t support chip cards, and doing so can make your business look a bit antiquated.
If you are getting a free mobile card reader (or a “free” device of any kind) from a merchant account provider, be aware that there could be a tradeoff. Of course, a top-rated merchant account provider such as Payment Depot will deal with their customers honestly and fairly and will give a free reader under their usual no-contract deal. Other merchant account providers, however, might require you to sign a contract to tie yourself to them for a more extended period. Read your contract carefully, so you understand which services you’ve signed up for and for how long. You should also understand how to get out of the contract if you’re not happy with the provider.
Despite the negatives and our caveats, all of these free readers will be serviceable. If you need one of these devices to get your business off the ground or for occasional off-premises use (e.g., trade shows), then these free readers should fit the bill.
How To Find The Best Free Credit Card Reader
Below, we will highlight four free readers currently available in the market. But, before we delve into the specifics of each, we want to point out a few benchmarks you should think about when considering any free reader.
- Reader Type: Typically, these readers will read magstripe and potentially EMV cards. It’s unusual to get a contactless (i.e., NFC) reader for free. Keep in mind that a magstripe reader could create a liability issue for you under some circumstances, so it is better to have a reader that can take both magstripe and EMV.
- Connection: There are two types of connections — physical connection or Bluetooth. The physical connectors can break off if you’re not careful, and a reader that uses a Bluetooth connection still needs to be periodically charged. We typically recommend a Bluetooth connection over a physical one since smartphones and tablets seem to be phasing out the headphone jack. For example, all the recent iPhones and the Samsung Galaxy Note 10 do not have headphone jacks.
- Software: A card reader is just a piece of hardware. Without its supporting software, the reader is useless. Each business is different, however, so its software needs are different. Some businesses will prefer a no-nonsense basic mobile processing app. Others might want additional functionalities, such as inventory tracking. Be sure to think through your software needs before you decide on a free reader.
- Battery Life: Battery life applies to Bluetooth and/or EMV readers. Ideally, you want something that can last you at least one day, so you can process credit card charges without interruption.
- Peripherals: A basic, pocketable magstripe reader that plugs into a headphone jack or Lightning connector won’t have any peripherals, but Bluetooth and/or EMV readers need cables to charge them up. Other nice-to-have items include carrying cases, docks, clips, and even lanyards that allow the user to carry the reader without losing or damaging it.
Now, let’s look at four simple readers that are available for free. For ease of reference, we’ve put the card reader comparison information into a table:
|Payment Depot Swift B200||Square Magstripe Reader||Shopify Chip & Swipe Reader||PayPal Chip & Swipe Reader|
|Reader Type||EMV, Magstripe||Magstripe||EMV, Magstripe||EMV, Magstripe|
|Connection Type||Bluetooth||Headphone jack (for Android) or Lighting connector (for Apple devices)||Bluetooth||Bluetooth|
|Processing Software||SimpleSwipe||Square Point of Sale||Shopify Lite or Shopify POS||PayPal Here|
|Battery Life||420 transactions||Not applicable||400 chip or 700 swipe transactions||“all day”|
|Peripherals||Micro USB charging cable; mounting sticker||None||Stand, micro USB charging cable, mounting sticker, travel case||Device clip, micro USB charging cable|
There are plusses and minuses to any free card reader. Ultimately, the “best reader” is the one that fits with the specific needs of your business.
Swift B200 From SwipeSimple
The Swift B200 from SwipeSimple is a Bluetooth magstripe and EMV reader. The parent company, CardFlight, makes two models of readers: the B200 and the B250 (which we review here). The B200 is the less expensive of the two readers, and it lacks the NFC card reader function in the B250.
The B200 can pair with both iOS and Android devices. It uses a rechargeable battery that lasts about 420 transactions. There’s a battery indicator LED light on the device, and the box includes a USB cable. You also get a lanyard and a carrying case.
SwipeSimple’s mobile processing app is available through several providers, but we recommend Payment Depot. Payment Depot is one of our top-rated providers because of its great customer service and fair, transparent pricing. The company also offers a mobile processing plan exclusive to Merchant Maverick readers, which includes the B200 reader for free (you can upgrade to the B250 for $25). You’ll pay $10/month plus 2.6% + $0.10 per transaction with no monthly minimums or additional fees.
We like the SwipeSimple app, and you can find more details about the app in our review. The app takes care of all your credit card processing needs without the clutter of too many extra features. If you’re a no-nonsense kind of person, this might be the app for you.
SwipeSimple Swift B200 Fast Facts
- Reader Cost: Free (when you sign up through Payment Depot)
- Payment Types Supported: magstripe, EMV
- Companion Software: SwipeSimple
- Connection: Bluetooth
Square Magstripe Reader
The Square Magstripe Reader is, as its name says, just a magstripe reader. This reader has been Square’s trusty free reader for many years, and it hasn’t evolved much. Of course, when Apple stopped providing headphone jacks on its phones, Square had to adapt to come up with the Lightning connector for its reader. (Soon, it will have to adapt again for Android phones, as Samsung seems to be phasing out headphone jacks too.)
The Square Magstripe Reader does not need charging, and it’s small enough to fit in your pocket to be carried around. There’s a certain elegance in that sort of simplicity, even though it’s only a magstripe reader that can open the merchant up to liability from fraudulent cards.
Square does offer a tradeoff for that liability, and, for some, the risk might be worth it. The Square magstripe reader works with the very robust (and free) Point of Sale app as well as opening up the rest of Square’s highly-rated (and value-added) services to you. In addition to processing cards at 2.75% per transactions, the Point of Sale app can also track inventory, manage employee hours, keep track of appointments, and do much more. So before you rule Square out based solely on its magstripe reader, we encourage you to think about your company’s future needs and see if Square might be a fit for you after all. Here are our full Square review and our Point of Sale app review to help you make a better-informed decision.
If you decide you want to upgrade to one of Square’s other devices later, Square offers financing for all hardware purchases starting at $49 — conveniently, the price of its Contactless + Chip card reader.
Square Magstripe Reader Fast Facts
- Reader Cost: Free (additional readers $10)
- Payment Types Supported: magstripe
- Companion Software: Square Point of Sale
- Connection: headphone jack or Lightning connector
Shopify Chip & Swipe Reader
Shopify is better known as an online shopping cart and eCommerce platform. With its free POS software and credit card reader, though, it appears to be branching into stores with physical locations. The Shopify reader is of a proprietary design. It’s a magstripe and EMV reader that comes with a charging cradle. Packaged in a neat little carrying case, you’ll also find a micro USB charging cable, mounting hardware, and everything else you need.
Shopify’s Chip & Swipe Reader connects to a mobile device through Bluetooth. The reader can process 400 chip transactions or 700 swipe transactions on one charge. It works with Shopify POS, which runs on both iOS and Android devices. If you subscribe to any of Shopify’s eCommerce plans, the POS app and hardware are included as part of your service. However, if you’re just interested in the mobile app and some tangential eCommerce features, you can opt for the Shopify Lite plan, which goes for $9/month and 2.7% per transaction. It doesn’t include access to all of the advanced features, but as a mobile offering, it’s quite serviceable.
Be sure to check out our detailed review of the Shopify Chip & Swipe Reader. We have reviewed Shopify’s eCommerce plans as well as its Shopify Lite plan and Shopify POS software. Take a quick look at the reviews and see if Shopify is a good fit for you.
Shopify Chip & Swipe Reader Fast Facts
- Reader Cost: Free
- Payment Types Supported: magstripe, EMV
- Companion Software: Shopify POS (with eCommerce plan or Shopify Lite)
- Connection: Bluetooth
PayPal Chip & Swipe Reader
PayPal first made its name as an online payments processor. These days it’s more of an all-in-one solution for businesses, including its free mobile software, PayPal Here, and the free card reader that comes with it. Like most other free readers in this article, the PayPal Chip & Swipe Reader is a magstripe and EMV reader that connects to a mobile device via Bluetooth. The reader comes with a micro USB charger and a clip for attaching the reader to the mobile device.
According to PayPal, the reader has enough battery to last all day. However, a little digging in the comments section of reviews and tech support messages suggests that some people have issues with the battery life. So you might want to proceed with caution if long battery life is important to you.
PayPal, like its closest competitor, Square, used to offer a free basic card reader. However, it discontinued that offer and implemented account restrictions on merchants who use the basic magstripe reader (see our PayPal Here review for more information on that). The free Chip & Swipe reader is a nice alternative to this policy. The mobile app is free to use, with transactions processing at 2.7%.
Signing up with PayPal gives you access to all its payment-related services. Make sure you understand the full scope of PayPal’s business as you consider whether or not to get the PayPal Chip & Swipe Reader. And if you do want a mobile card reader with contactless support, check out the PayPal Chip & Tap reader.
PayPal Chip & Swipe Reader Fast Facts
- Reader Cost: Free
- Payment Types Supported: magstripe, EMV
- Companion Software: PayPal Here
- Connection: Bluetooth
As you look through the reviews, don’t forget to look at the upgraded readers available from each provider. You might wish to take these readers into account, so you’ll know how much more it might cost you in the future to upgrade.
Don’t Be Fooled By The Promise Of A Free Card Reader
Mobile card readers are usually loss leaders used to entice merchants to sign up with a particular card processor. The free readers tend to be a simple piece of hardware without a lot of extras, and they tend not to be able to read NFC signals, so customers won’t be able to tap to pay. For the card processors, free readers are merely a way to introduce you to their other services.
Before you sign up, it’s important to research the processing company to make sure the mobile software and other features are worthwhile and that the pricing works for you. Otherwise, while you might get your free card reader, you will suffer the administrative headaches or reduced profits that come with choosing the wrong credit card processing company.
Lastly, don’t forget to read our article, The Best Credit Card Readers For Your Small Business, for a truly comprehensive discussion on the best card readers in the marketplace today.
Have you used any of these free readers? If so, what’s your experience with them?