Is It Time to Switch to Mobile Credit Card Processing?

Posted by on November 28, 2012 in Business Technology [ 0 Comments ]

Is It Time to Switch to Mobile Credit Card ProcessingCredit Card Processing No Longer Chained to a Fixed Location

For many years, the standard credit card processing procedure involved a fixed credit card terminal and the electrical outlets, surge protectors and other hardware the terminal required. But mobile credit card processing does away with all that, allowing you to process transactions on smartphones or tablets. Merchant accounts for mobile credit card processing can even accommodate multiple users, so you can have multiple mobile credit card processors in use on multiple smartphones at the same time. Furthermore, mobile credit card processors often charge a flat rate per transaction that is less than the cost of a traditional credit card processing fee. As you may imagine, the possibilities this technology opens up for small businesses are almost limitless.

Starbucks’ Switch to Mobile Processing

Mobile credit card processing is not limited to small or one-person businesses. In fact, in 2012 Starbucks began the switchover of its debit and credit card payment processing to Square, one of the most well-known mobile processing companies. With Square and other mobile processing systems, a card reader is plugged into a mobile device and works with an app that lets a person accept credit card payments wherever they happen to be. It’s a boon to food trucks, independent cleaning services, dog walkers, and those who sell at craft fairs. Big companies can use mobile processing to make sales at trade fairs without having to worry about electrical infrastructure (other than for keeping phones charged).

Benefits of Mobile Processing

Mobile credit card processing reduces your equipment “footprint” and the amount of stuff you have to haul around for doing business away from your primary location. As long as the smartphone or tablet it’s connected to is charged, you don’t even need an electrical outlet. Here are some other benefits of mobile credit card processing:

  • It’s PCI compliant and encrypted with secure sockets layer (SSL) technology
  • It’s “green” because there are no paper receipt rolls to haul around; customers receive their receipts through email or SMS messaging.
  • Power outages and sketchy mobile coverage are not problems. If, for example, you make a sale where there isn’t good mobile coverage, the processor has a feature built in to automatically store and forward transactions when coverage becomes available.
  • Funds can be deposited within 36 hours, giving you quick access to them. Furthermore, mobile card transactions are categorized as “card present,” which costs you less in processing fees.

Mobile Credit Card Processing and Security

To remain compliant with PCI regulations, you need to follow certain procedures with your mobile credit card processing:

  • Use your mobile credit card reading device as a dedicated business device. If your friend owes you money for the time you went out for drinks, for example, don’t give in to the temptation of allowing them to reimburse you with a credit card. Mixing personal and business finances can cause problems should you ever be audited.
  • The only people who handle the device itself should be you and a trusted employee under your supervision. Losing the device or letting a personal friend use it is asking for problems.
  • Make sure that the app you are using for mobile credit card processing does not save card information after transactions are run. It should purge this data automatically, and you should check to make sure that it does this. Keeping card data on a server connected to the internet violates PCI regulations due to vulnerability to hacking.
  • Review transactions regularly. After a busy day at a trade fair, for example, you should review the day’s transaction history to ensure that all transactions were legitimate. Should you notice a suspicious charge, report it right away for your own legal protection.

Is Mobile Credit Card Processing Cost-Effective?

Depending on your credit card processing provider and your sales patterns, mobile credit card processing can be very cost-effective. Square, for example, charges 2.75% of each transaction amount or allows small businesses to pay a flat $275 monthly fee. Small businesses often pay 3% to 4% in transaction fees on credit card processing because they don’t have the clout to negotiate better fees with traditional payment processors.

According to data collected by Barclays Capital, mobile commerce in 2011 in the U.S. increased by over 80%, to $5.3 billion. With mobile processing, your options for accepting payments are no longer tied to your landline and your physical retail location, opening up countless sales venues that used to be limited to cash transactions.

Photo Credit: Phillip Pessar

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