Credit cards are convenient, but processing payments can be costly for small businesses. Enter mobile credit-card readers, which seem to be swiping more and more business from banks and third-party payment processors.
One mobile credit-card reader, made by Square, is now used by more than 1 million merchants nationwide -- that's one in eight U.S. merchants, Daily Deal Media reports. Square's market share could grow, as it recently announced its reader will soon be sold at OfficeMax and The UPS Store locations.
Meantime, software maker Intuit showed off its redesigned GoPayment Card Reader at the Consumer Electronics Show in Las Vegas, the website iSource reports.
GoPayment, Square, and a third player -- Pay Anywhere by North American Bancard -- are increasingly replacing banks and "traditional" credit-card processing companies by offering free mobile credit-card readers.
The readers are free, but merchants must sign up for an account -- some pay-as-you-go, some with monthly fees. The companies take a cut of 1.7% to 3.7% per transaction, depending on your account type, your volume of business, and whether the credit card is swiped or keyed-in, according to AllBusiness.com.
For established businesses, mobile credit-card reader fees may be much lower than what you're used to paying. For startups and street vendors, mobile credit-card readers can offer legitimacy in the eyes of customers, as a recent article in Silicon Valley's San Jose Mercury News explained.
Experts suggest the mobile payment revolution is just getting underway. Companies like Google are investing in innovations like Google Wallet, which uses near field communication technology: Customers can pay by simply hovering their smartphone over a reader. Currently, however, Google Wallet only works on one type of smartphone.
- Intuit redesigns GoPayment mobile credit-card reader (ZDNet)
- Will iPhone 5 have Pay-by-Phone Option? (FindLaw's Technologist)
- Small Biz Credit Cards Not Protected by CARD Act (FindLaw's Free Enterprise)
- Small Business Center (FindLaw)