The Best Credit Card Readers For Your Small Business 2020

So you want to use your cell phone or tablet to process payments for your business. Whether this is your first time around with a credit card processing app or you’re just wondering if it’s time to upgrade that old credit card swiper 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 system instead? Which are the best credit card readers for my business?

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 and its hardware so that you understand the drawbacks and shortcomings of each as well as all the advantages.

But first, let’s set the record straight about some terminology.

Credit Card Reader VS Credit Card Machine: Know Your Terms

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. Some also refer to them simply as a credit card swiper, or a mobile/portable card reader. A card reader must be connected to a phone or tablet, which runs a mobile POS (mPOS) app. Again, sometimes you’ll see them referred to as credit card processing apps, mobile processing apps, or sometimes just mobile payments apps (but the term “mobile payments” is also extremely vague). All of these terms refer to the same setup.

A credit card machine (also called a credit card terminal) is larger and typically includes an integrated receipt printer and a PIN pad. Credit card machines require a connection to either a phone line or the internet to function, but they do not have to connect to a POS app to accept payments. As long as they have their own internet connection, they can accept credit card payments. This connection is usually wired, but wireless credit card machines do exist, allowing for some portability.

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

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/Tablet 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, cell phone credit card readers support one of these connection methods, but not both. There’s always an exception to the rule, however, and I have seen devices that can connect either way. 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.

What About Credit Card Scanners?

Another term that comes up often with mobile processing is credit card scanner — which actually isn’t a piece of hardware at all. Mobile card readers don’t offer the ability to scan cards. Instead, some credit card processing apps can access the device’s camera to securely read the information on a card. It’s important to know that the camera scanner feature doesn’t take a picture of the card and store in on a device — that would be a violation of PCI DSS security standards. Instead, the mPOS app accesses the camera and reads the data, then encrypts it and processes the card as a card-not-present transaction. That means you’ll typically process the card at a higher cost than swiped, dipped, or tapped transactions. One example of an app that uses this approach is Flint Mobile. Check out our Flint review for more information about how it works.

Credit Card Reader For iPhone VS Credit Card Reader for Android

Generally speaking, mPOS apps tend to offer more features to tablet users, especially those with 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.

Also, with newer iPhone models, Apple opted to discontinue the headphone jack. That means that mobile card swipers that use the 3.5mm headphone jack connection aren’t compatible with newer iPhones (but will still work with newer iPads). However, in a pinch, you can use a 3.5mm to Lightning adapter to make the card reader work with a newer iPhone. Lightning connector card swipers for iPhone do exist, but they generally are quite expensive and are mostly meant to be used with virtual terminals rather than mobile apps. They also generally do not include support for EMV/chip cards, just swiped transactions.

Features To Look For In Mobile Credit Card Readers

I’ve seen a lot of mobile card readers in my time. They’re rarely substantially different from one another, apart from the aesthetic differences. And sometimes even the design of different card readers is still remarkably similar.

But even if the differences between readers are small, they’re still worth considering. There’s also the not-so-small matters of the processing app itself, and of course, the price of the reader and payment processing fees. Let’s take a quick look at what you need to be on the lookout for when shopping around.

Supported Payment Methods

While a basic magstripe reader might be tempting (especially if it’s free), at minimum, every merchant should have an EMV/chip card reader, which helps reduce your liability for fraudulent transactions. However, you should also consider whether you want to accept contactless (NFC) transactions, sometimes called “tap to pay” transactions. If your clientele is the sort that would enjoy the security and speed of being able to tap their phone rather than dipping or swiping, it’s definitely worth considering a mobile card reader that can support all three payment forms. However, even if you don’t want an all-in-one reader, it’s worth making sure your card reader includes both a magstripe and chip reader.

Credit Card Processing App Features 

The biggest differences between mobile credit card readers are actually the mobile apps they work with. So when you’re shopping around for a mobile card reader, you’ll probably focus first and foremost on the app and look at the hardware second. Before you start looking around for a mobile app and card reader, it’s a good idea to have an idea of must-have features. Do you need complex sales tax management? Is being able to offer in-app discounts important? What kind of inventory management do you need? Are there any other features that are very important to have? Keep a list of must-haves and “would be nice” features so you know what’s most important and can decide where to make tradeoffs, if necessary.

Cost

The cost of a card reader — and any additional hardware, such as receipt printer or cash drawer — is a big concern. If you need multiple card readers especially, that’s a large up-front cost. However, it’s not just the mobile reader that can put a dent in your bank account. Some mobile processing apps come with monthly fees — and even if they don’t, you still have to consider the actual cost of transactions. These can end up costing significantly more than the card reader, so it’s very important that you do the math and make sure whatever mobile provider and service plan you choose is genuinely a good value.

While comparing pricing quotes can be complicated and the best value for each business depends on several factors, here’s a general rule of thumb:

Percentage-based transaction costs (e.g., 2.75%) often cost the least for businesses, especially those with very small ticket sizes ($20 or less). Business with larger average transactions (upwards of $50 or more per transaction) start to see savings with other pricing models such as interchange-plus (interchange + 0.3% + $0.20) or mixed flat rate (2.6% + $0.10). At higher-volumes, especially with large transactions, subscription pricing models (a monthly fee and a flat per-transaction fee with no percentage markup) can yield large savings as well.

As far as software costs, make sure that any monthly fee you pay covers all devices used and all user accounts. If you need to pay an additional fee for additional devices or additional logins, you might want to check whether another provider is offering these features at no additional charge.

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 don’t fall into the trap.

For one, free card readers tend to be pretty basic, and some only support magstripe transactions or connect via the headphone jack instead of Bluetooth. At the very least, you should have a chip card capable reader. 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.

Don’t let a free reader be the only determining factor in choosing an mPOS, but if one is available and all other factors are equal, it’s definitely worth considering.

Top 5 Mobile Card Readers For Small Businesses

So now that we’ve covered the basics of card readers and mobile processing technology, let’s take a look at what your best options are! Keep in mind that there really isn’t a good one-size-fits-all solution, so consider what you need and which features are most important to you. Also don’t forget to budget for whatever hardware you need, especially if you do need multiple card readers.

Payment Depot Mobile (Swift B200 Reader)

Payment Depot (read our review) actually has a broad range of merchant services with subscription-based pricing, but here we’re focusing specifically on Payment Depot’s mobile plan (read our review), with exclusive pricing for Merchant Maverick readers. That means you’ll have to use the link provided here to sign up for the offer. With this mobile plan, you can get the SwipeSimple mobile POS app and card reader.

SwipeSimple is actually a mobile app made by a company called CardFlight and is available through several merchant account providers. We’re focused only on Payment Depot here. The app has all the core features mobile merchants need, plus a few extras (such as a virtual terminal). With Payment Depot, you can get the SwipeSimple app for just $10/month and transactions processing at 2.6% + $0.10. What sets Payment Depot apart is the fact that Payment Depot will give you your own merchant account, whereas the others in this list use the third-party aggregating business model.  That means less of a risk of an account hold or termination.

Payment Depot offers new merchants a free Swift B200 reader, a chip and swipe mobile reader that connects via Bluetooth. It’s a small rectangular device and can be strung on a lanyard or mounted on a phone case. That’s a pretty great deal all around. However, if you’re interested in contactless/NFC payments, you can get the B200’s big sibling, the B250 for just $25. It’s another Bluetooth reader with magstripe, chip, and contactless payment support. You can check out our review of the B250 for more information as well.

Payment Depot Swift B250 Fast Facts

• Reader Cost: Free
• Monthly Fee: $10
• Transaction Fee: 2.6% + $0.10
• Connection: Bluetooth
• Payment Types Supported: Magstripe, EMV

Square (Contactless & Chip Card Reader)

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. The mPOS app itself, Square Point of Sale, is easily the most powerful free mobile processing app available, with inventory tracking, invoicing, advanced reporting, a free customer database,  and more.

The Contactless + 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?) The Contactless + Chip card reader relies on a Bluetooth connection to process transactions. But it doesn’t support magstripe cards at all. To get around this, Square includes a magstripe reader in the package as well.

The card 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. If you opt for the Square Stand, which is the company’s entry-level tablet register, you get the Contactless + Chip reader and the dock bundled with it.

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 over a few months. Expect to pay a little bit more in the long term as a trade-off for the convenience of the installment plan, but Square’s markups are extremely reasonable, all things considered. The dock sells for $29 — and if you’re interested in the Square Stand, the whole kit starts at $199.

Check out our my in-depth review of the Contactless + Chip Reader (and the dock) to see if it’s right for you.

Square Contactless + Chip Reader Fast Facts 

• Reader Cost: $49 (dock available for additional $29)
• Monthly Fee: $0
• Transaction Fee: 2.75%
• Connection: Bluetooth
• Payment Types Supported: EMV, NFC/Contactless (separate magstripe reader included)

PayPal (Chip & Swipe Reader)

Next to Square, PayPal Here (read our review) is probably the best-known mobile POS app on the market. It’s not as robust as Square, but it does have all the essentials that merchants need, plus invoicing. If you use PayPal to sell online (read our review), all of your data syncs in one convenient platform, which is a big draw. PayPal is entirely pay-as-you-go, with no monthly fees. Swiped, dipped or tapped transactions process at 2.7% each.

PayPal offers several card readers, including a basic magstripe reader for $15. However, if you opt for just the magstripe reader, PayPal will place limits on the number of sales you can process per week without incurring holds. For that reason, it’s better if you just skip over the magstripe reader and go for the Chip and Swipe Reader, which connects to phones and tablets via Bluetooth and supports both magstripe and chip card transactions. It’s a small, rectangular device about the size of a business card (but thicker, obviously).

At $24.99 for a Bluetooth device that accepts both EMV and magstripe, the PayPal Chip & Swipe Reader is the most affordable options for card readers. However, if you’d like to add support for contactless (NFC) payments from mobile wallets, PayPal also offers a Chip & Tap Reader for $59.99. There’s even a dock so you can use it in countertop register setups. Check out the Chip & Tap Reader review for more information about it.

PayPal Chip & Swipe Reader Fast Facts 

• Reader Cost: $24.99
• Monthly Fee: $0
• Transaction Fee: 2.7%
• Connection: Bluetooth
• Payment Types Supported: Magstripe, EMV

Shopify (Chip & Swipe Reader)

Shopify (read our review) is mostly associated with ecommerce, but it’s moved toward an all-in-one approach that includes a POS  app that’s powerful enough to work in retail stores or on the go. The full-fledged POS is designed for a countertop setup with a cash drawer and receipt printer, and is included with all Shopify online store plans. However, for a very reasonable $9/month, you can get Shopify Lite (read our review), which supports sales through social media and a buy button on your own website, as well as access to the mobile POS. In-person transactions with Shopify Payments process at 2.7%.

The key POS features are the same in the Lite plan as they are in other Shopify service plans; the big difference is the lack of hardware support and the lack of unlimited staff PIN access. The Shopify Lite plan also includes an invoicing feature, and of course, everything syncs between your in-person sales and any online sales through Facebook.

Shopify’s Chip & Swipe Reader, the mobile reader it developed in house, is a sleek white device. As the name implies, the reader can handle both magstripe and chip card/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 Shopify offers one for free to new merchants. The Chip & Swipe Reader is easily one of the more beautiful card readers I’ve seen, as well as innovative and well priced. Check out my Shopify Chip & Swipe Reader Review for a closer look at it.

Shopify Chip & Swipe Reader Fast Facts

• Reader Cost: $29 (free for new merchants)
• Monthly Fee: Starting at $9/month
• Transaction Fee: 2.7%
• Connection: Bluetooth
• Payment Types Supported: Magstripe, EMV

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 noting that SumUp operates in quite a few countries across Europe (including the UK) as well as South America, which makes it an interesting global solution. There’s no monthly fee for using the app, and transactions process at 2.65% each.

The SumUp Air, the company’s mobile card reader, shows its European sophistication with its sleek white minimalist design. It’s actually won an award for its innovative design. The reader 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.  You can get the SumUp reader for $29 in the US, which is a good price for an all-in-one reader. Outside the US, prices and your card reader options will vary.

SumUp Air Reader Fast Facts

• Reader Cost: $29
• Monthly Fee: $0
• Transaction Fee: 2.65%
• Connection: Bluetooth
• Payment Types Supported: Magstripe, EMV, NFC/Contactless

Which Mobile Credit Card Reader Is Right For You?

I’m not even going to try to 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 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. At this point, there’s no reason why you shouldn’t be taking such a basic step to protect 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.
• The cost of the mobile app and payment processing are more important than the cost of a card reader, so make sure you compare processing rates and other fees before you rule out a card reader based on the device’s cost.
• 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.

The best mobile credit card reader for your business depends on the features you need, your payment processing volume, transaction size, and other factors. However, we’re confident in saying that any of the options on this list would generally be a good starting point for any business. Some of them you can try on a pay-as-you-go basis, while others come with month-to-month agreements. In either case, you won’t be locked into an expensive yearly contract, which reduces the risk for you significantly.

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!