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4 Ways To Accept Credit Cards By Phone

According to Forbes, mobile credit card payment is expected to grow with mobile phone usage and predicted to increase from a current $75 billion to $503 billion in 2020. Furthermore, mobile technology has disrupted the way sales are done and it has enabled merchants to make it easier for customers to buy their products.

In this context, it is becoming imperative for many types of businesses to be able to accept mobile payments. If you are unsure how to set this up for your business, here are four ways you can accept credit cards by phone.

Credit Card Reader

Mercator Advisory Group further forecasts in their Payments Journal that there will be close to 28 million mobile credit card readers in circulation by 2021 – in comparison to the 3.2 million that were around in 2014.

A mobile credit card reader will turn your cell phone into a credit card machine. You will need a device that plugs into the phone to do this. The capabilities of this device can vary but there are ones on the market with the latest technology like tap and go payments provided by PayPass.

Credit card Readers are ideal for transactions where the owner and the credit card are present – otherwise they won’t be of much use. If this is the payment solution for you look at a mobile credit card reader like Sumup, Square Up, Pay Anywhere or PayPal’s credit card reader.

Payment App

These mobile apps allow merchants the freedom to sell to customers at events, pop-up shops, or wherever they meet-up and also has the capability to manage inventory and transactions. These credit card payment gateways are like “online” credit card machine. Customers submit their credit card details and it allows you to receive payment.

These gateways are run by companies like PayPal. They would require business information; identification and that you go through a process to link your bank account. As a merchant you will have to create the right buttons on your website to link to this service. It’s important to note that merchant fees will vary.

Business Insider adds that if your business is of such a nature that you need both a card reader and an online payment app, you should look for a processor that supports both methods. PaySimple further explains that some apps come with a merchant account which is handy if you don’t have one.  A merchant account is what enables your business to accept credit cards.  They add that some apps have the ability to securely store customers’ card information which is handy for repeat customers. They add that if you or your staff sometimes works on a computer it will be handy to look for an app that includes a web application.

What other systems do you need to share your payment data with?  Be sure to find a mobile app solution that comes with reporting that can agree with your accounting system, or any other systems that you use.

An actual merchant account

If you don’t want to use a company like PayPal you can set up a merchant account with a bank. Once approved this will allow you to accept credit and debit cards.

The process generally works as follows: after you have entered your customer’s credit card information by either swiping, tapping or doing it manually the data is transferred to a merchant’s account, through a payment gateway. If the payment is approved then you can accept it and complete the transaction. The funds, minus payment processor’s fees, will be deposited into your bank account.

Payment processing company

It might be cheaper to sign up for a payment processing service. These services like Ezidebit and globalpayments, allows you to take credit cards but also accept direct debits but does not require the opening of a separate merchant account. She adds that the fee structure is also clearer.

It’s also good to know that payment processors provide direct connections for merchants to credit card networks like Visa or MasterCard. He adds that for small business owners wishing to use their mobile phones for online purchases a “hosted checkout” might be the best way to go. To do this a customer is directed to a secure payment page hosted by the payment gateway provider. “The goal is to make checkout as simple and seamless as possible while still inspiring confidence in the checkout process.”

How to choose the right payment facility

Affordability and simplicity are the two key factors to consider when choosing a way to accept credit cards on your mobile phone. Factors to consider should include price, ease of use, mobile apps, easily understandable fee structures, reliability and the ability to accommodate in-store, ecommerce and invoice payments.

Another major online publication, Business Insider, advises that merchants accepting less than $3,000 per month in credit card payments should contract a mobile credit card processing company (sometimes called a payment facilitator).

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