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Pros and Cons of Using Credit Reader Apps for Small Businesses

Efficient and secure payment processing is a small business essential. Mobile payment processing, also known can help make it easier for small businesses to process credit and debit cards at any location.

Prior to mobile card readers, businesses needed to use a terminal that was hardwired in a fixed location. Now, mobile card readers make it possible to process payments almost anywhere – from a pop-up store to an outdoor market, a food truck to a trade show or a client's place of business. Accepting payments on-site at the time of purchase means your company will get paid faster than waiting on a check to clear or an invoice to be sent and paid.

A person using their smartphone to pay at a cafe.

These are some pros and cons to keep in mind when considering different mobile credit processing platforms:

Flexible contract options. Mobile processors offer a variety of contract options, many with shorter term commitments than traditional credit processors. Rates, fees and term lengths vary, so it is important to evaluate your different options prior to choosing a service provider.

Different types of card readers. Most small businesses will want to use an EMV reader or contactless NFC reader rather than a credit card swiper. Card swipers accept magnetic stripe (magstripe) payments rather than chip payments. EMV card readers, better known as "chip card readers" are know to be the most common and secure option and provide better liability protection to merchants. Prior to 2015, credit card issuers were typically liable for a fraudulent card purchase. The EMV compliance law that went into effect in 2015 stipulated that all businesses must accommodate EMV chip cards or be liable for fraudulent transactions. Consequently, using a chip reader offers merchants greater liability protection. Another option is the NFC reader, also known as the "Near Field Reader," which accepts mobile wallet or digital wallet payments via Apple Pay, Google Pay and Venmo.

Differing levels of customer support. Different credit readers come with varying levels of customer support. To offset lower fees and more flexible terms, some companies with mobile processing may offer limited, live customer support. Traditional credit readers are more likely to provide 24/7 live support. Consider your support needs prior to choosing your provider.

Security and privacy concerns. All businesses that process credit cards must be PCI-DSS compliant (Payment Card Industry-Data Security Standard), a set of standards that ensures sensitive cardholder data is appropriately protected. Card payment processors have three main security features: encryption, tokenization and EMV processing.

With security concerns continuing to evolve, small businesses need to stay up-to-date on the latest risks. Ensuring your mobile payment processing platform that your business uses has encryption, tokenization, and EMV processing is an important first step.


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