Mobile credit card processing is a development that has transformed many small businesses. Today, many consumers carry little to no cash when they shop. Cash is too much of a liability because if it is lost or stolen, there's little chance of ever getting it back. That's not the case with credit cards -- most credit card institutions don't hold consumers liable for fraudulent purchases. People expect businesses to accept credit cards. If a small business couldn't handle the financial burden of opening a merchant account, it would risk losing potential customers.
Mobile Payment Processing Has Transformed Small Business
Mobile payments have made credit card acceptance accessible to any small business. When you create an account with a mobile credit card processing company, you'll get a card reader that you can connect to your smartphone or tablet. Often, you'll even receive the card reader as a free bonus simply for signing up. Instead of utilizing a third-party merchant account for depositing your funds, the mobile credit card processing company will collect the funds from issuing banks when customers buy from you and send those funds directly to you.
Benefits of Mobile Credit Card Processing
The primary benefits of mobile credit card processing are accessibility and simplicity. By using a mobile credit card processing company, you're essentially "cutting out the middle man." There's no need to open a separate merchant account or buy an expensive and complicated POS system. Your mobile phone or tablet has an Internet connection and all of the processing power that you need to process credit card transactions -- and the mobile card processor provides free software to make the card reader and mobile device communicate with one another.
Do you need more features than just the ability to accept mobile payments? No problem. The best mobile credit card processing companies are growing quickly, and they're adding the features that budding businesses require. You can get a customized dock, for example, that essentially turns your iPad into a cash register with a touch screen. The dock includes a USB hub that allows you to connect a printer and bar code scanner. You can even upload custom product photos to help your cashiers and create a rewards program to encourage repeat business.
Drawbacks of Mobile Credit Card Processing
A mobile credit card processing company tends to have a simplified fee structure compared to a traditional merchant services company. A mobile credit card processor usually doesn't earn extra money from membership fees, early termination fees and POS system rentals. Instead, mobile card processors earn money from transaction fees -- so they deal in volume. Mobile credit card processing companies operate on thin margins and work with many small businesses. If you need support, reaching a human can be difficult.
Because a typical mobile credit card processing company only charges fees when it processes transactions, you usually don't have to worry about membership charges, equipment rentals and other fees. You'll only pay when you accept a credit card payment. On the other hand, the fee per transaction may be higher than a traditional merchant services company would charge. Whether you would actually save money by using a mobile credit card processing company may depend on the number of credit card transactions that you process each month. If you have a high-volume business, it's likely that mobile payment processing will cost more than a traditional credit card processing company.
What Types of Businesses Should Use Mobile Payments?
Accepting credit card payments through a mobile device is ideal for a small business that either has relatively low sales volume or mainly has cash sales. If you only need a simple solution for processing an occasional credit card payment and don't want to pay membership and other fees to a merchant services institution, mobile credit card processing is ideal for you.
You should also consider using mobile payments if you frequently make sales away from your principal place of business. For example, let's suppose that you have a food truck. A food truck can do well as a cash-only operation, but you'll never have to turn customers away if you can accept credit cards as well. A smartphone consumes little space, and its Internet connection is always active. If you need to accept credit card payments anywhere, mobile credit card processing is perfect for you.