Mobile Credit Card Processing: The Swipe of the Future

Turning your website into an eCommerce shopping cart is so easy in the 21st century that credit card processing is almost an invisible step in the process. The shopping cart software does all the work and the payment gateway and merchant accounts are an automatic feature of the software.

Mobile credit card processing is the most modern and accessible new way to grow your business: in some cases you will need to obtain your own merchant account provider and accompanying hardware.

But there are even newer options out there for mobile credit card processing (Square for iPhone and iPad) that don’t even require you to set up a merchant account. Nevertheless, this application of credit card processing is the wave of the future and will most likely replace the sliding imprint machines and carbon copy slips as well as minimizing the use of the credit card terminal for merchants on the go.

Before you can accept credit card payments, you need to prove that you’re a business. Mobile payment solutions are specifically designed for small businesses, so mobile payments is a great way to go for a wide variety of merchants. Mobile credit card processing is portable, versatile and has significantly lower entry-level costs than other options.

After your business is legitimately established (following the local, state and federal licensure requirements) here is what you need to begin accepting credit card payments:

Merchant Account

A merchant account is a specialized bank account where credit card payments from your business are processed. This is how your business accepts credit card payments from the internet and now, from your mobile phone. There are plenty of specialty providers of merchant accounts, but you can also apply for one through your bank, though this isn’t always the most cost-effective method.

Mobile credit card processing services will either provide a merchant account for you and directly process your credit card transactions, or in the case of some banks, outsource the actual processing. Additional per-transaction fees will apply to merchant accounts; look into a cross-section of them and crunch the numbers to find the best rates for your business situation.

Payment Gateway

Payment gateways actually process the credit card transactions (payment gateways can be described as where the point-of-sale happens). All retailers need a merchant account, but only e-commerce and m-commerce (mobile commerce) businesses need a payment gateway. The payment gateway is where the money exchanges hands and is then routed back into your merchant account to complete the transaction.

The 21st century standard is that mobile credit card processing solutions utilize an integrated payment gateway or are partnered with online payment gateways like or PayPal. This illustrates how the credit card processing has become such an invisible (yet the most important part) of online transactions. Even this step is becoming more invisible as some mobile credit card processing specialists realize they can offer this step without the retailer even needing a merchant account, but that’s another story for another guest post.

Mobile Phone or Tablet Computer

If you already have a smartphone or tablet (iPhone, iPad, Droid, Palm Pre… whatever), chances are you can find a mobile payment solution that will solve the credit card processing needs specific to your business. But there are also mCommerce solutions that will work with just about any phone with internet access and Java ME support (not all require Java support). The benefits of using your business mobile phone for accepting payment are many, not the least of which are fewer equipment dollars spent and instant credit card processing, whether you’re working the local farmer’s market or selling your wares on Etsy.

Card Reader

A portable card reader isn’t necessary anymore because you can just key-in the credit card numbers. The transaction is instant and you can take advantage of lower per-transaction percentage fees because the bank verifies the card on-the-spot. There are a number of Bluetooth card readers and even Bluetooth printers (for receipts) that are more portable than the terminals of the past, and can save you time and in the long run, money.

Depending on which solution you choose, they may or may not offer a card swiper as part of the solution. This is just one of the many decisions you will need to make according to what you can afford to spend to process your business credit card transactions.

June Nelson has contributed to blogs and websites since 1999. She has been researching and writing about credit card processing for six years.

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