Accept mobile credit card payments anywhere with your iPhone

coleypauline (Creative Commons BY or BY-SA)

There are a number of add-ons that can turn your iPhone into a mobile credit card processor.

Do you need to take credit card payments on the go for your business? Do you operate a food truck, maybe, or sell your wares from a booth at trade shows or craft fairs? There are now several different hardware add-ons that can turn your iPhone into a credit card processor. (There are also several additional apps that accept manually input credit card numbers; see the sidebar for more information.)

In the olden days -- last year, say -- retailers had to go through a lengthy process to accept credit cards, and often had to pay $150 or more to purchase a card reader that could only attach to a land line. Those days are officially over, and with the iPhone readers we'll review here, you can get paid wherever and whenever you might be.

All of these apps are still somewhat rough around the edges. There are usually two different fee structures: one for when the card is physically present and is swiped through the reader, and a higher set of fees charged if it isn't. (This is because there’s greater risk of fraud for cards not present.)

Process credit cards without hardware

There are a number of older iPhone apps that offer payment processing without a hardware add-on, including mTerminal from go eMerchant, eOnlineData's Mobile Merchant, and NELiX TransaX Mobile. The problem with these apps is that because they didn't have any way to physically swipe the card, they had to charge you higher transaction fees.

To use any of the readers reviewed here, you begin by signing up online with a Web form (or, in some cases, within the iPhone app itself) to create a merchant account -- a type of account that banks require for anyone to accept credit card payments. As part of this process, you must identify yourself and authorize the checking account that will collect your deposits. Once your account is set up, you can begin accepting payments with your iPhone.

All of the apps described here have the ability to email receipts to your purchasers as well as to yourself, and have Web-based management dashboards that show you the status of your purchases and collections. These are nice features and some users of the typical point-of-sale credit card machine might be interested in switching to the iPhone readers too.

If you already have a merchant account with your bank, you'll need to set up a new one, because each device is tied to a particular payment processor. In the past, merchant accounts took lots of time and effort to set up and had monthly account fees even if you never charged a single credit card on them. That is all changing now with these devices. In each case, we were able to accept payments within hours of starting the process.

All of these solutions are limited to US account holders, and in some cases will only accept charges from cards issued to US-based addresses too. We looked at three hardware credit card readers, some of which are free. (There is another reader available, called RoamPay, which we didn't test.)

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