Accepting Credit Cards on your iPhone or Android

Guest Post By Eric

Hardly anyone carries cash anymore, and checks are nearly obsolete. In today’s modern society, it’s all about the plastic.

Unfortunately, credit card processing is an expensive service to provide, often requiring annual contracts, costly monthly fees and more. If you’re not making huge sales numbers every month, it could become a hindrance to your profit margin. So as a business owner, how do you balance the demand from your customers to allow credit card transactions, while keeping your overhead costs low and manageable?

It’s simple: get a smartphone.

Thanks to new technology, an iPhone or Android-based smartphone can be turned into a credit card processer with just a small device and a quickly downloaded app. Processors like Square and GoPayment offer these services, allowing you to take payments whenever and wherever your business takes you. All you need is a smartphone.

Plus, these services are free to set up and inexpensive to manage. So whether you only have a few credit card payments from a couple customers a year or you need to be able to accept payments on the road or away from a traditional credit card terminal, mobile card processing may be the right option for you.

To start using your iPhone or Android as a credit card processor, you simply need to sign up for a service, such as a Square or GoPayment. (These are the two most popular providers.) With Square, you will need to submit to and pass a credit check before you can be approved for an account.

After you apply for an account, you will be mailed a small device called a dongle. The dongle hooks into the headphone jack of your iPhone or Android and is where you will swipe your customers’ cards. You will also need to download your service’s app; this will allow you to type in transaction amounts, as well as key in card numbers manually for over-the-phone orders or cards on which the magnetic strip is no longer working.

Square and GoPayment can both be linked to your bank account, so transactions, once processed, will be deposited directly into your account.

As for fees, mobile payment processing is very inexpensive compared to traditional credit card processing merchants. It does not require a contract and typically does not include a monthly fee (unless you choose a monthly fee to get a lower rate.) Square has a payment schedule based solely on transactions: swiped card transactions are charged a fee of 2.75 percent, while manually keyed-in cards are charged a fee of 3.5 percent, plus $.15.

GoPayment’s fee schedule is a little different:

These per-transaction rates can save businesseslots of money in the long run, especially in comparison to the monthly fees required of traditional credit card processing merchants.

And mobile card processing isn’t just for businesses. Millions of people across the country carry iPhones and Androids for personal use; all it takes is a small device and a downloadable app, and they can start accepting credit cards, too.