Mobile Credit Card Machine – how it works?

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In today’s ever evolving and technological sophisticated business world, credit card machines are radically changing the means of credit card payment available to businesses and customers today.

Mobile credit and debit card readers connected to smartphones or tablets now makes it easy for business regardless of size to quickly and easily process payment.

This sophisticated but profoundly easy to operate piece of equipment offered by new generation companies like iZettle or SumUp has completely transformed the payment processing landscape in a lot of ways.

As a business owner, all you need to receive any credit card payment is:

  1. Smartphone or tablet
  2. Free app
  3. Portable credit card machine

That’s it. You are ready to go!

In the past, operating a conventional credit card terminal was impracticable for small businesses with low transaction mostly as a result of terminal rental cost and monthly fees.

However, with the introduction of mobile credit card readers, small businesses can now avail themselves the opportunity of easy mobile payments once available to only big businesses.

Mobile credit card machines facilitate the process of accepting credit card payments online, through phone or physically.

With its state-of-art encryption technology, credit card readers provide a secured payment platform that ensures fraud screening and also real time transaction reporting. For transactions online, only a virtual terminal is required.


Technology used in mobile card machines

Businesses are now replacing the functionality of standard credit card terminal hardware with a card payment application running on the smartphones or tablets.

This normally work with dedicated hardware readers capable of transferring magnetic stripe data to the application, while some are also known to work with smart card utilizing EMV and other related technology, though this is not common with smartphone readers.

In some cases where the hardware is unavailable, these applications also support manual entry of the card number and other data.

In addition, so many devices are beginning to support built-in RFID or NFC technology to accommodate mobile device or contactless payment methods, without usually requiring additional external card readers.

By switching to the use of credit card readers to instantly capture credit card information instead of manually inputting transaction details, merchant can now benefit from the efficiency of reduced payment processing time.

Before now, businesses could obtain lower processing cost by processing chip card rather than magnetic strip cards. However, security is usually of a particular concern to such users as such platforms are usually unsecured, unencrypted open platform systems.

Lots of security breaches resulting in large scale theft of cardholders date have occurred in the past as a result of point of sale malware where fraudsters gained access to data stored insecurely systems run by merchants.


Traditional card machines vs. mobile card readers

It is important however, to make a clear distinction between new generation credit card payment processors like iZettle and SumUp and traditional credit card terminals and readers.

Traditional countertop readers which have been around for a long time are connected by an Ethernet cable or landline and payment is processed by entering of PIN number on a keypad.

Consequently, there are portable versions of these credit card equipments that utilize GPRS communication technology to connect to a mobile network. These types of terminals are often used at restaurant to accept payment.

Considering the complexity and higher cost of these traditional credit card processors, some companies have gone into the business of providing a variety of portable credit card processing machine rental services for long and short term use.  However, it is evident that this is not a practical solution for small businesses with limited fund.

Data connection appears to be the major different between the older and the newer systems.  The new generation systems – mobile credit card machines – represented by SumUp and iZettle utilizes the shared data connection of the smartphone/tablet which eradicates the need for a GPRS communication system (or dedicated landline) . Mobile card reader connects via Bluetooth with the smartphone or tablet and utilise Internet connection of those devices. All mobile terminals providers offers free iOS and Android apps to securely work via this connetion.

Key Takeaway

In conclusion, the answer to the nagging question for small and medium size business owners as to how to process credit card payment is simple – a mobile credit card terminal using your smartphone or tablet is currently the best.

The services offers by most credit card terminal services like iZettle and SumUp do not come with any monthly fee or long contract.  Once you have acquired the Chip and PIN card machine, you are ready to start processing payment in a cheap and affordable way.


Last updated: 22/10/2017


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