Today, consumers have the convenience to pay for goods and services using a variety of payment methods. Consumers can pay by credit card, debit card, or even near-field communication with a credit card reader. The days of accepting traditional swipes using a magnetic stripe are fading fast. Soon enough, those traditional payments will be replaced with contactless payments made by the best mobile phones, top wearables, and other advanced POS terminals. With technology continually expanding the way consumers make payments, staying on top of the latest and greatest credit card readers is key for small businesses.
How does a Credit Card Reader work?
Whether you are trying to launch a new business or expand your existing operation, it’s crucial to have a credit card reader. In an increasingly cashless society, businesses need secure ways to process banking information from a customer’s credit or debit card. Credit card readers are a vital component of a point-of-sale (POS) system.
A credit card reader is a device that decodes the personal and financial information contained in the magnetic stripe or microchip of a credit or debit card. After “reading” the information, it then transmits this information to the payment processor, which confirms that the funds for the purchase are available. Card readers are an essential component of the modern payment processing system. Learn about how to use a credit card reader, popular types, and a few must-have features!
What types of payments can you accept with a credit card reader?
Magnetic Stripe Cards
A magstripe reader reads the magnetic stripe on credit cards. Most credit and debit cards have a stripe of magnetic information on the back of them. This stripe contains the cardholder’s information like the cardholder’s name, account number, and the card’s expiration date. If the magnetic stripe becomes dirty, scratches, or demagnetized, the card may not work.
Chip Cards
EMV chip cards are cards that use microchips to transmit financial information to financial institutions when inserted into a credit card reader. Similar to the magnetic stripe cards, the microchip contains the cardholder’s information, but also includes enhanced security features. Instead of swiping the card through the payment card reader, the consumer inserts the card into the chip reader terminal.
NFC Technology | Contactless Payments
Near-field communication (NFC) is a contactless payment method. As the name suggests, contactless payments don’t require any physical contact between the buyer’s credit card or smartphone and the credit card reader. You can pay for goods and services with just a simple contactless tap of a phone, card, or wearable device. Whether through cards, mobile apps or digital wallets, contactless payments use near field communication with the payment card reader. As long as the retailer has a contactless-enabled credit card reader, your device or contactless enabled card will automatically complete the transaction. It’s a frictionless experience that saves time for everyone involved.
Credit Card Readers: What are the Parties Involved?
There are numerous parties involved in a single credit card reader. When all these parties come together, their services allow the device to accept cards without any issues. Typically, these are the top 5 parties involved:
Equipment Manufacturer
This refers to the party that manufactures the card reader hardware. Most of the time, a manufacturer will include some type of hardware warranty with your credit card reader.
Credit Card Networks
The credit card networks facilitate transactions between merchants and card issuers. The major card networks include Visa, Mastercard, Discover, and Amex. Most of these card types are automatically added with each merchant account that a business owner sets up. All of these card networks charge fees to the business owner in the form of interchange costs for running each card type. In some cases, business owners may opt out of accepting specific card types such as Discover or American Express.
Credit Card Issuer
Credit card issuers are the financial institutions that provide credit cards to consumers. They determine the credit card limits and any consumer fees and rewards.
Merchant Service Provider
This is a company that bundles the services of different card networks and lets you accept their corresponding credit and debit cards. When these solutions are integrated into an applicable credit card reader, you can accept any associated payment card with ease. In addition, merchant service providers normally charge a small fee for each transaction processed. Some service providers may also charge a monthly subscription fee.
Internet Provider
Most modern credit card readers require a wired ethernet or Wi-Fi connection to accept payments. Therefore, you will need a good internet connection at your business.
6 Top Features in a Credit Card Reader
1. Ease of Use
A cluttered interface or too many confusing steps can annoy your staff and customers on a busy business day. In-person payments should be quick, simple, and hassle-free! The best credit card reader will have step-by-step instructions and a straightforward button layout. By optimizing the user experience, your business can enhance usability and reduce customer irritation. Additionally, one of the most important things is that your team is confident in using the credit card reader!
2. Security Features
Did you know – Without robust security, scammers can steal interpret transaction data in every swipe? The best credit card reader will adhere to the highest encryption standards, such as PCI compliance. It will meet crucial security requirements, including data encryption, secure storage, and strict access controls. Card readers that follow the best practices have strict access controls. Even if the credit card reader is compromised, the sensitive card data remains secure and inaccessible!
3. Transaction Speed
Slow credit card readers can turn shoppers away. Every lost customer is a lost sale! Therefore, the transaction speed of a card device is a crucial feature. Not only do faster transactions contribute to a smoother customer experience, but efficient card readers make a significant difference in your ability to turn over sales. The best credit card reader will allow you to focus more of your valuable time on business operations, rather than stressing about lost customers.
4. Considerable Pricing
Beforehand, take time to account for 2 things:
- Upfront cost: The initial expense of the terminal, also known as the sticker price. The upfront cost does not include activation charges, setup costs, or mandatory software subscriptions.
- Long-term value: This is the total cost of ownership over the device’s lifespan. It is the upfront cost plus all the ongoing expenses like maintenance costs, transaction fees, software upgrades, and priority support. Also, keep in mind that there will always be unexpected expenses from time to time. Prioritize a high-quality credit card reader with transparent pricing to avoid future surprises.
5. Durability and Reliability
Beyond high-volume transactions, the best credit card reader must be able to withstand physical wear and tear. Accidents are bound to happen, and your device should be water resistant and shock-absorbing for an extended lifespan. A great way to gain an unbiased perspective is to read customer reviews and testimonials. Check sources like the provider’s website, major retailers, industry forums, and professional networks to gauge the card reader’s reliability.
6. POS Compatibility
The best credit card reader should sync with your existing cash register and POS software system. It helps avoid manual entry errors and speeds up the checkout process. With one swipe, insert, or tap, a well-integrated reader automates everything in real-time.
The Best Credit Card Readers
Dejavoo Credit Card Reader
Dejavoo credit card readers are a range of payment terminals that can accept credit card payments, including EMV chip cards, NFC contactless payments, and swipe transactions.
- Dejavoo Z11: A countertop terminal with a touchscreen that can connect via Wi-Fi, Bluetooth, ethernet, dial-up, RS232, or USB. It has a thermal printer and can accept EMV and magnetic stripe cards.
- Dejavoo Z8: A secure, high-speed terminal with a built-in PIN pad and a 2.4-inch LCD color screen. It comes in two versions: dual comm (IP or dial-up) and tri comm (IP, dial-up, or Wi-Fi).
- Dejavoo Z9: A compact, handheld, wireless EMV card reader that’s suitable for businesses of all sizes.
- Dejavoo QD2: A mobile credit card reader that can use Wi-Fi or 4G.
- Dejavoo QD4: A countertop credit card reader that can use WiFi or ethernet.
PAX Credit Card Reader
The PAX credit card reader is designed to be flexible, innovative and powered by Android. They can handle a variety of payment types including magnetic strip cards, EMV payments, and contactless payments.
- PAX S80: This flexible card terminal has a smart card reader for accepting EMV payments, and a contactless reader for accepting contactless payments. It also has security features such as address verification and CVV and CID.
- PAX A35: This Android Multi-Land PIN pad has a touchscreen display, integrated camera, and Wi-Fi/Bluetooth connectivity. It also has PCI PTS 6.x and contactless certifications.
- PAX A920: This smart credit card machine has a big bright touchscreen and front-facing and rear-facing cameras. It also has two spots for SIM cards so it can be used wirelessly.
Clover Credit Card Reader
The Clover POS system is exceptionally user-friendly and intuitive. The software supports numerous payment types, which boosts customer convenience. You can accept credit card payments and many contactless payment methods, including NFC mobile payments like Apple Pay, Samsung Pay, and Google Pay.
- Clover Mini: A POS system that fits in any space and accepts chip, swipe, and contactless payments.
- Clover Flex: A portable POS system that allows businesses to accept payments, manage inventory, and run reports from anywhere.
- Clover Station Solo: A POS and payment system for merchants that want to simplify and centralize payment acceptance, customer engagement, and operations management using one integrated device.
Ingenico Credit Card Reader
The Ingenico credit card reader enables NFC couponing and wallet use cases, in addition to EMV chip and PIN, swipe and contactless payments. Featuring intuitive card readers and applications menu, the Ingenico card reader provides a seamless payment experience.
- Ingenico Desk 3500: Geared to small retailers who want the same customer-facing options as large retail businesses. This terminal is useful for owners who want to accept every available payment type at an affordable price.
- Ingenico Desk 5000: A one-stop payment solutions vehicle that accepts swipe and sign, EMV Chip and PIN, and contactless payments. This versatile Ingenico terminal also processes digital wallet and NFC couponing sales transactions.
NMI Card Mobile Reader
With the NMI card mobile reader, businesses can accept mobile payments on smartphones and tablets. This device allows for contactless payments on the go. You can accept mobile wallet and in-app payments – all from a single payment gateway platform!
How Gulf Management Systems can help your Business!
GMS is your partner for fast and affordable payment solutions! We take a personalized, consultative approach and develop powerful management solutions customized to your business. Looking to accept payments in person? GMS has you covered with the best credit card readers that you need to never miss a payment again!
We offer a full selection of payment solutions, including payment management software, automatic billing, ACH processing, merchant services, mobile payments, and other point-of-sale terminals. With over 30 years of payment processing experience, it’s safe to say we are definitely the payment experts!
ACH Payments: Accept one-time or recurring checking or savings drafts from your customers.
Credit Card Processing: Never miss a payment again! Accept Visa, Mastercard, Discover, or Amex at your business.
Software: Use our software to manage your gym, nonprofit, etc.
Point-of-Sale Terminals: We offer stand-alone POS options for accepting payments at your retail business.
Direct Deposit: Eliminate the need for writing checks by making direct deposits into your employee’s bank account.
API & Gateway Options: Connect your website, software, or e-commerce website with our gateway or API.
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