The Best Credit Card Readers For Your Small Business

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Posted on: Apr 9, 2018
Posted by: Melissa Johnson

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So you want to use your cell phone or tablet to start accepting payments for your business. Whether this is your first time around or you’re just wondering if it’s time to update that old credit card reader you’ve had for four years, there’s certainly a lot to consider. What kind of technology is out there? How much does a cell phone credit card reader cost? Should I get a credit card machine and POS instead? Which are the best credit card readers?

I’ve seen a lot of mobile card readers in my time. And the first thing to understand is that the card reader is tied to the mobile processing app (mobile point of sale, or mPOS for short). Sadly, we can’t just mix and match one card reader with another app. So before anything, you need to look at the software and make sure it’s a good fit for your needs. You should also check the processing rates and the cost of the hardware.

Apart from aesthetics, the reality is there aren’t a lot of differences between one card reader and the next. They all have the same core features, and they all use the same sort of security. Reliability is as much a product of the app design as it is the hardware design, sometimes moreso. So while you do want a good, affordably priced credit card reader, you should first narrow down the list of potentials using the software as your main criteria. Once that’s done, you can take a closer look at all the hardware.

If you are curious about what your hardware options are, read on! I’ve compiled a list of the most popular credit card readers and their specs. Make sure you read our reviews for each mobile app so that you understand the drawbacks and shortcomings of each as well as all the advantages.

But first, let’s set the record straight.

Credit Card Reader vs. Credit Card Machine: Know Your Terms

So what’s the difference between a credit card reader and a credit card machine? While it’s certainly possible that you might encounter some people who use the terms interchangeably, “credit card reader” is generally the term for small mobile devices that connect to smartphones and tablets and process transactions through a mobile app. We consider this the absolute easiest way for a new business to accept card payments, as we discuss in our post on phone-based credit card processing. This connection can be physical or wireless. However, the smartphone or tablet typically has to also have either cellular signal or a Wi-Fi connection.

A credit card machine (also called a credit card terminal) is larger, not mobile, and generally connects to a full-fledged POS. They may or may not have an integrated receipt printer or a PIN pad device for customers. Credit card machines require a connection to either a phone line or the Internet to function. Some machines are capable of wireless Internet connections, but they do add to the cost.

The biggest difference between a credit card reader and a credit card machine is price, though. A mobile card reader can cost anything from $10 to about $80, whereas the typical entry-level price for a machine is about $120. However, depending on what features are included, a credit card terminal can cost $600 or more.

Types of Credit Card Readers for Phone & Tablet

When categorizing credit card readers, you need to consider two criteria: how the device connects to your phone or tablet, and which payment methods the device accepts (we’re not talking about manual entry options just yet).

Phone Connection Options:

3.5mm/Headphone Jack: Most of your entry-level credit card readers will connect to a phone or tablet via the 3.5mm headphone jack. However, it’s worth noting that this design is slowly fading out. Part of the driving force is Apple’s removal of the headphone jack from its iPhones, but I think it’s also a result of our overall shift toward wireless. It’s worth pointing out that both Square and PayPal have Lighting to 3.5mm headphone jack adapters that will allow you to continue to use their magstripe readers.
Bluetooth: Bluetooth readers are becoming increasingly common. They’re compatible with both iOS systems, they’re secure, and they allow for some sophisticated card reader designs. The one downside to Bluetooth readers is that they can run low on power quickly if they’re always connected without a “sleep” mode.

Generally speaking, credit card readers for smartphones and tablets support one of these connection methods, but not both. There’s always an exception to the rule, however. With Apple moving toward Lightning ports for everything, it’s worth getting a Bluetooth device, which will ensure that no matter what smartphone or tablet you get in the future, the card reader will be able to connect.

Supported Payment Methods

Magstripe: Until 2015, magstripe transactions were the only form of credit card payment commonly accepted in the US. Magstripe transactions (also referred to as swipe transactions because they are made by swiping the card through a terminal or card reader) are still supported, but becoming superfluous as other, more secure payment methods become available.
EMV: In October 2015, a major liability shift occurred, shifting responsibility for fraudulent swipe transactions onto merchants, if that card had an EMV chip and the merchant did not have an EMV-enabled credit card reader. As a result, you probably saw a surge of chip cards appear, and payment processors rushed to introduced new hardware capable of processing chip card transactions. Chip cards are more secure and can help reduce in-person fraudulent transactions.
NFC/Contactless: Apple Pay, Android Pay, Samsung Pay, and all of the other “Pay” apps you’ve seen rely on NFC (near-field communication) technology. Transactions are often called contactless or “tap” transactions.

All mobile card readers on the market accept some combination of these three payment methods. As a merchant, it’s important that you are able to process EMV transactions to protect yourself against liability for fraudulent transactions.

Card Readers for iOS vs. Card Readers for Android: Is There a Difference?

Generally speaking, mPOS apps tend to offer more features to tablet users, especially iPads. But apart from enhanced features for tablets, there usually isn’t much difference between apps for iOS vs. apps for Android.

The same goes for mobile card readers. Unless the app itself is built to function only on one operating system, a card reader for iPhone or iPad works with an Android phone or tablet. So if your business has a mix of Android and iOS devices, you can use your hardware on both. You’ll just have to worry about pairing and re-pairing any Bluetooth devices as needed.

Now that we’ve identified the defining traits of credit card readers, let’s look at the mobile card readers from the most popular mPOS systems: Square and PayPal.

Square Credit Card Readers

Square (read our review) is definitely a leader in the mPOS industry, both for its software and hardware. It was one of the first mobile systems to embrace chip cards and it seems to put a high priority on keeping its hardware affordable. Square even made our shortlist for the best credit card processing companies for small businesses, which is unusual for an app-based system.

The one piece of Square hardware that we haven’t included here is the Square Register, which is more of a full-fledged POS than a mobile system. Check out our full review of Square Register for a closer look at the system.

Square Magstripe Reader

If I wanted to be extremely hyperbolic, I would say that Square’s magstripe reader is synonymous with mobile processing. Instead, I’ll just say that the white and boxy device certainly is iconic. The overall design hasn’t changed in years. Available for free if you order directly from Square or $9.99 at retail stores such as Staples (Square will reimburse you later), this entry-level device connects via the headphone jack, and as the name says, handles magstripe transactions only.

Cost: Free ($9.99 reimbursed if bought at a retail location)
Connection: 3.5mm
Payment Types Supported: Magstripe

Square Chip Card Reader

If you just glance at the Square Chip Card Reader (read our unboxing review), you might not notice any immediate differences between the magstripe reader and the chip card reader. That’s because Square didn’t exactly reinvent the wheel. The Chip Card Reader is slightly thicker than the original, with an extra slot for inserting the chip end of a credit or debit card. Unlike the magstripe reader, you need to periodically charge this model. Square sells the Chip Card reader for $29, which is, all considered, a pretty good price for a device that can handle magstripe and EMV transactions.

Cost: $29
Connection: 3.5mm
Payment Types Supported: Magstripe, EMV

Square Contactless & Chip Card Reader

The Contactless and Chip Card Reader from Square doesn’t exactly break the mold as far as design: White, boxy, with Square’s logo set into it. What’s that expression? If it isn’t broke, don’t fix it?

Unlike the previous two card readers, the contactless and chip card reader relies on a Bluetooth connection to process transactions. And it doesn’t support magstripe cards at all. To get around this, Square includes a magstripe reader in the package as well.

The contactless and chip reader sells for a very reasonable $49, but if the upfront investment makes you cringe a bit, Square also offers an installment plan that will allow you to pay off a portion of the cost each week. Expect to pay a little bit more in the long term as a trade-off for the convenience of the installment plan, but it’s nowhere near as bad a hardware lease program from a traditional merchant account.

The contactless and chip reader is a slim, slick little device and you can certainly use it in a handheld mobile situation. But Square also sells a clever little dock to charge the device and still allow you to use it. The dock goes for $29 on its own, but it is optional.

Cost: $49 (dock available for additional $29)
Connection: Bluetooth
Payment Types Supported: EMV, NFC/Contactless (separate magstripe reader included)

Square Stand

The Square Stand isn’t really a card reader — it’s an iPad stand with an integrated magstripe reader. But it was one of the devices that helped make Square so popular with merchants. These days Square sells the stand with a contactless and chip card reader plus the dock. But it merits a mention here because it shows that mobile card readers can also be used in countertop/retail setups. Square even sells bundles and kits with everything you need to get set up.

The Square Stand plus the card readers will run you $169, which is less than you’d pay for all the individual components — the stand ($99 originally). The contactless and chip card reader ($49), and the dock ($29). Bundles that include a cash drawer and receipt printer start upwards of $500, not including the iPad.

Cost: $169
Connection: Bluetooth
Payment Types Supported: EMV, NFC, Magstripe (integrated into tablet stand)

PayPal Credit Card Readers

The other major name in the mPOS space (and commerce in general) is PayPal. The company’s mobile processing app, PayPal Here (read our review), isn’t quite as full-featured as Square, but you’ll find a lot of similarities between the two, especially as far as business model.

PayPal Mobile Card Reader

PayPal’s mobile card reader is a standard magstripe reader with a headphone jack connector. While the color has changed from PayPal blues to black, the overall shape hasn’t: it’s still a simple and quite stable triangle that connects via a headphone jack. There’s no frills or fuss here.

PayPal used to offer the mobile card reader for free through its website, but that’s no longer the case. It’ll cost you $14.99 to get started, though it’s worth the extra money to upgrade to at least an EMV reader.

Cost: $14.99
Connection: 3.5mm
Payment Types Supported: Magstripe

PayPal Chip & Swipe Reader

PayPal’s Chip and Swipe reader is a step up from its Mobile Card Reader, with a sleek rectangular design. It’s about the size of a credit card and slim at just half an inch thick. Plus, $24.99 for a Bluetooth device that accepts both EMV and magstripe, makes it one of the more affordable options for card readers, especially if all you need is mobile support.

Cost: $24.99
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV

PayPal Chip & Tap Reader

If you want more than just magstripe and EMV support, PayPal also sells a Chip and Tap reader that allows you to accept Apple Pay, Android Pay, and other contactless methods. The Chip and Tap reader looks quite a bit different from the Chip and Swipe reader. Though it’s still black, it’s boxy and measures 0.75 inches in depth.

I actually hate to say this, but the PayPal reader reminds me a bit of Clover Go’s all-in-one reader, just more refined. And unlike the Chip and Swipe reader, this design is meant for both mobile and countertop use — and PayPal offers a charging dock for those who are interested in a countertop setup.

Alone, the reader sells for $59.99, but a bundled kit with the reader and dock sells for $80 (PayPal indicates that’s a markdown from $89.99 on its website). I don’t see the dock listed for sale separately, but I would assume it would sell for $30 on its own.

Cost: $59.99 (bundle available for $79.99)
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

PayPal Chip Card Reader

PayPal’s Chip Card Reader was actually the first EMV-enabled reader the company offered, and it wasn’t PayPal’s own design. The reader is actually a branded Miura M010, which has also previously been offered by Square, and is still available from Shopify as well.

The Chip Card Reader is a handy little mobile reader, but you can get a dock for it and mount it in a countertop setup (at least, until PayPal possibly phases this device out of its lineup). Despite its rather bland name, this reader accepts magstripe, EMV, and NFC/contactless payments. However, it comes at a steep price $79, which is still less than the original $150 it sold for. It’s worth noting that despite the PIN pad, it doesn’t support PIN entry because PayPal Here doesn’t support debit transactions.

Cost: $79
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

Alternatives to Square & PayPal Readers

While Square and PayPal are certainly two of the biggest names, they’re not the only options if you need a mobile credit card reader. Let’s take a look at some of the other processors and what hardware they offer.

Shopify

Shopify is mostly associated with eCommerce, but it’s moved toward an all-in-one approach that includes a POS (read our review). The full-fledged POS package is designed for a countertop setup and syncs with your Shopify store. However, for a very reasonable $9/month, you can get the Shopify Lite plan, which supports sales through social media and a buy button on your own website, as well as access to the mobile POS. Keep in mind that this is designed almost exclusively for retail environments. For mobile users, though, Shopify offers two readers.

Shopify Tap, Chip & Swipe Reader

I mentioned before that PayPal’s Chip Card Reader is actually made by another company and is called the Miura M010. Shopify licenses the same device and calls it the Tap, Chip and Swipe reader.

Again, you have a Bluetooth connection with support for magstripe, EMV, and contactless transactions. Shopify sells the reader for $89, which is on the higher end of things. The dock sells for $39. However, the reader is well designed and very functional, and if you want to accept Apple Pay and other “Pay” apps with Shopify, it’s the only option.

Cost: $89 (dock available for $39)
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

Shopify Chip and Swipe Reader

Shopify’s Chip and Swipe Reader is a sleek white device. As the name implies, the reader can handle both magstripe and EMV transactions, but not contactless/NFC. I like that it comes with a dock charging dock by default, instead of as a pricey add-on.

The retail price for the reader is listed as $29, but as I am writing this, Shopify is offering it for free. The Chip and Swipe Reader is easily one of the more beautiful card readers I’ve seen, as well as innovative and well priced.

Cost: $29
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV

Payline Mobile

Payline Data is a traditional merchant account processor, but its Payline Mobile app (read our review) is actually a viable standalone processing option even for low-volume and seasonal merchants. The company offers a standard magstripe reader (the Ingenico G5X) that isn’t particularly interesting. Its other mobile reader, though, is the Ingenico RP457c, and it is definitely one of the more innovative card reader designs I’ve ever seen.

For starters, the RP457c can connect to cell phones and tablets through the headphone jack or Bluetooth, which is very uncommon. It also supports magstripe, EMV, and NFC transactions all in one. The device is designed to clamp onto phones or rest in a dock for use as a wireless reader.

Payline doesn’t disclose its current pricing for the RP457c, in part because some merchants may be eligible for a free device. However, I was able to confirm that the reader retails for $150, which is quite expensive.

Cost: $150
Connection: 3.5mm, Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

SumUp

SumUp (read our review) is a European company that opened up processing for US merchants in 2017. While it’s not as comprehensive as other mPOS options, it does everything most merchants will need to do. It’s also worth pointing out that the SumUp mobile card reader, called the SumUp Air, actually won an award for its innovative design.

The SumUp Air shows its European sophistication with its sleek white minimalist design. It relies on a Bluetooth connection to process magstripe, EMV, and contactless transactions. If you want more information, check out our unboxing review of the SumUp card reader.

Cost: $69
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

Intuit/QuickBooks GoPayment

Intuit’s mobile payment solution, QuickBooks GoPayment (read our review) appeals mostly to a small but viable niche — QuickBooks Online customers who need an easy way to take payments in person. While the app isn’t loaded with advanced features, it will work pretty well for merchants with simple needs. Intuit offers two readers to address merchant needs.

Chip and Magstripe Reader

Intuit’s Chip and Magstripe reader is a small, gray, unassuming device. It doesn’t have quite the sophistication of some other readers (I might even call it bland), but the design is overall good. The curves have a sort of friendliness about them rather and prevent it from looking boxy like other devices. As the name implies, this card reader supports magstripe and EMV transactions. It connects to a phone or tablet via Bluetooth.

The Chip and Magstripe Reader goes for $19 normally, but Intuit is offering the reader free for new merchants. That puts it at the lower price end, especially for a Bluetooth enabled device with EMV. You can also connect the device to computers running QuickBooks Desktop Pro 2018 and future versions of the software.

Cost: $19 (free with signup for new merchants)
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV

All-In-One Card Reader

Intuit’s newer card reader is an all-in-one device that connects via Bluetooth. But unlike its sibling, this device supports magstripe, chip card, and contactless transactions. By default, it’s meant to nest in a charging dock.

Intuit sells the all-in-one reader for $49, which is not a bad price at all considering that the dock/cradle is included at no extra charge. It has the same sort of nondescript gray finish, but Intuit has embraced a curvy aesthetic that is easy on the eyes.

Cost: $49 (including dock)
Connection: Bluetooth
Payment Types Supported: Magstripe, EMV, NFC/Contactless

Is a Mobile Credit Card Reader Absolutely Necessary?

You don’t actually have to have a mobile credit card reader to process payments with a mobile POS system.

Flint Mobile, a mobile processor that works through Stripe, has no credit card readers at all. Instead, the app relies on a device’s camera to scan cards. The camera doesn’t actually snap a photo of the card, which would be a huge security issue. But the app is able to open the camera and scan a card the same way QR code readers are able to access the camera to open QR code links. Flint has a couple of filters it applies to the camera for added security.

That said, Flint isn’t the only mobile option with this ability. PayPal Here and Intuit GoPayment also include the camera scanning feature.

Not only that, but most mPOS apps also include a feature that allows you to manually key in transactions. These process at a higher rate that swiped/dipped/tapped transactions because they’re processed as card-not-present, like ecommerce transactions. But it’s a useful alternative when the card reader is being glitchy or the card is very worn. The notable exception to all this is SumUp, a company that started in Europe and doesn’t support manual entry for cards except through its virtual terminal.

Of course, if you don’t want to pay extra for manually entering transactions, it might be best to spend a little extra money and buy a backup card reader or two in case one starts to misbehave.

Are Free Credit Card Readers Worth It?

Several mobile POS options (including Square) provide an incentive for potential customers in the form of a free credit card reader. This can certainly make it more tempting to try out a payment processing service, but it shouldn’t be the deciding factor.

For one, free card readers tend to be pretty basic. Some have EMV support, but none of the free card readers on this list support contactless payments. Contactless support may not be mandatory for everyone, but EMV support should be a mandatory feature for every merchant. A reader with a Bluetooth connection will also ensure it’s future-proof no matter what phone or tablet you upgrade to later on.

Two, a free mobile card reader will absolutely not offset a processor’s shortcomings, such as poor customer service or missing features. It’s smarter for merchants to make a decision based on the quality of the mobile app, its features, and the processor’s customer support.

So while the ability to try some mPOS options without any upfront investment is nice, please don’t let a free credit card reader be the reason you pick one processor over another. Make sure you explore all of your options.

Don’t let a free reader be the determining factor in choosing an mPOS.

Final Thoughts

I’m not going to try and convince you that mobile credit card readers are the world’s most fascinating subject (even if I could probably talk your ear off for a couple of hours about all the different designs and features and how they embody the philosophies of the companies that sell them).

But if nothing else, you should take away a few key ideas that will prepare you to choose a mobile point of sale app and a credit card reader:

Software is more important than the hardware. Make sure the app has what features you need before you set your heart on a device.
Make sure the card reader you choose has EMV support. In 2018, there’s no reason why you shouldn’t be taking such a basic step to protect yourself and your business.
Prices for credit card readers range from totally free to upwards of $75. How much you want to spend is entirely up to you, but you will generally pay more for Bluetooth connectivity and for NFC support. Don’t be suckered in by the offer of a free reader, because there are lots of other criteria you should consider first.
You don’t technically need a mobile reader to take payments on a phone or tablet. However, you will pay more to process manually entered transactions in your mPOS app, so it’s a good idea to get one anyway.

Thanks for reading! If you’re ready to choose an mPOS app, a great place to start is our mobile processing comparison chart! Otherwise, if you have questions, feel free to leave us a comment!

Bio
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Melissa Johnson

Melissa Johnson has been writing about payment processing and mobile payments since 2014, and has been quoted in articles for Credit Karma and The Next Web, among others. She graduated from The University of Kansas in 2010 with bachelor's degrees in English and journalism.

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