Types Of Credit Card Readers

Consumers have long made debit and credit card purchases in-store and online. With 41% of Americans now reporting that none of their typical weekly purchases are made using cash, however, businesses can adapt by offering customers the chance to use modern payment methods in every possible setting. This is where credit card readers come in.

Let’s delve into the types of credit card readers that are now available to merchants. Once you’re familiar with the kinds of card readers out there, you’ll be able to choose the best credit card reader for your business.

Types Of Card Readers

Credit card readers can be classified in different ways, but we’re going to examine them in terms of their basic structure and how they can be used. This way, if you know what use cases you want to be able to handle and how much you’re prepared to spend on equipment, you’ll know which type of card reader will fulfill your business needs.

Mobile Credit Card Readers

Mobile credit card readers are small, portable, internet-connected devices that take magstripe, EMV (chip card), and/or NFC (contactless) payments. In order to process a payment, your reader must be paired (typically via Bluetooth) with a mobile POS app that is run from your smartphone, tablet, or computer.

Like the Shopify Tap & Chip Card Reader pictured above, many mobile card readers are simple devices that do not sport a PIN pad or a display. Other mobile card readers, like the Helcim Card Reader pictured below, feature both a small display and a PIN pad, which allows you to take PIN debit transactions.

Most modern mobile card readers are charged via USB cable or a plugged-in charging dock. When charged, a mobile card reader should retain a charge anywhere from a few hours and a full sales day. Your sales frequency will impact how long you can go without recharging your device.

A few older magstripe-only readers, such as the Square Reader for magstripe (pictured below), connect directly to your phone or tablet and don’t need to be charged at all. As we explain in our piece on the Square magstripe reader, Square offers one free magstripe reader to new accounts, making it great to have as a backup in case your primary POS goes down, as Square has no monthly fees either.

However, magstripe technology is very dated from a security standpoint, so you shouldn’t use a magstripe-only reader for anything more than occasional transactions.

Mobile credit card readers can be obtained as part of an all-in-one payments package à la Square, PayPal, or Helcim. Other mobile card readers are sold as-is and require the use of an mPOS app that supports the device in question.

Smart Terminals

Like mobile card readers, smart terminals are designed to take payments wherever a transaction is being made — at the front register, at the table in a restaurant, in a food truck, etc.

The key difference is that smart terminals have a touchscreen and the ability to run mobile POS software directly on the device. This eliminates the need to pair the device with a smartphone or tablet. Many smart terminals let your customers see an itemized list of what they are purchasing before completing the transaction.

Other smart terminals offer such software features as employee logins and the ability to let customers choose to receive a digital receipt.

Additionally, some smart terminals have built-in accessories. For example, the Square Terminal (pictured above) comes with a receipt printer inside the device, while the Clover Flex offers a built-in camera, barcode scanner, and receipt printer.

Virtual Terminals

Unlike the previous two options, a virtual terminal is not a physical card-reading device (though many smart terminals sport virtual terminal functionality). Rather, a virtual terminal is a software application that lets you key in a customer’s card number to process a transaction.

A virtual terminal allows you to take payments over the phone. As such, it can be a good option for delivery services, local professionals, freelancers, and others who find it convenient to take payments remotely. A virtual terminal also allows you to take payments from customers whose credit/debit cards refuse to swipe or tap property.

Most merchant services providers offer a virtual terminal, often at no extra cost.

What Are Contactless Card Readers?

A contactless card reader is a device that can accept NFC (a.k.a contactless) payments from customers using NFC-enabled credit/debit cards. These readers can also take payments directly from NFC-capable smartphones used by customers who use mobile wallets like Apple Pay and Google Pay.

Most modern mobile card readers and smart terminals can accept contactless payments, though there are some older readers that do not.

Getting Started With Credit Card Readers: Other Considerations

Choosing the right card reader for your business is a good first step towards meeting your customers’ needs. Making the right choice involves knowing how a card reader works and understanding the different fees and rates involved.

Once you’ve determined what you need and studied the available options, you’ll be able to choose the credit card reader that provides the benefits your business needs and keeps your customers happy by offering the modern payment options they’ve become accustomed to using.