How to Accept Credit Card Payments on Your Smartphone

How to Accept Credit Card Payments on Your Smartphone

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More and more businesses around the world are turning to mobile POS payments for B2B and B2C payments to the tune of $745 million in 2019. That number is expected to grow by 30.1 percent annually reaching approximately $2 billion in payments by 2023.

Credit card payment by phone makes transactions possible and easy for many types of businesses. These include the predictable retailers, restaurants, food trucks, artists, and farmers markets.

But mobile credit card payment on the spot also works for any type of mobile business or sales that previously used invoicing and checks to get paid. Plumbers, hair stylists, event planners, gardeners, massage professionals, HVAC professionals, independent physicians, tutors, and home-service physicians are just a few examples.

But how exactly do you get started accepting credit card payments by phone? To help, SeamlessChex has put together the basics of accepting mobile credit card payments. Keep reading to learn about the apps and hardware that you’ll need, payment provider plan options, and how to get started.

  • Phone Credit Card Processing Basics
  • Credit Card Readers
  • Payment Plan Options
  • Signing Up for a Plan
  • Credit Card Payment by Phone for Your Business

Phone Credit Card Processing Basics

To accept credit card payments by phone, you’ll need to download a processing app onto your smartphone and get a credit card reader that sends the credit card information to the app. A payment processing company like SeamlessChex gives you the app to download. The company processes the credit card information, takes a small fee, and deposits the rest of the payment into your company’s bank account.

Payment processing companies offer different types of plans for mobile credit card payments. These include flat-rate, tiered, and interchange-plus pricing plans. Your best bet is to talk to the company offering the plans to get a clear understanding of all prices and then do the simple math to see which is most cost-effective for the size of your business and, therefore, the volume of your sales.

Credit Card Readers

The credit card reader is a small piece of equipment that lets you swipe or insert your customer’s credit card to read the electronic information on the stripe or chip.

Mobile phone credit card readers either plug into your smartphone in the earbud jack or use Bluetooth technology to send the information to the app on your phone. The information is encrypted and sent directly to the payment processing company. It is not stored on your smartphone. This protects the credit card owner and you from theft.

Some credit card readers only let you swipe the magnetic stripe to accept mobile credit card payments. These are not as safe as the readers that read chip cards using EMV technology are for preventing credit card fraud.

With losses of up to $400 million a year from mag-stripe credit card transactions, EMV is key.
EMV stands for Europay, Mastercard, and Visa. It’s another layer of data protection that authenticates the credit card transaction, protecting both the merchant and the customer. It can detect unusual transactions and alert your payment processing company if an activity is suspected to be fraudulent.

The Payment Plan Options

In order to accept credit card payments by phone, you’ll need to sign up for a payment plan. Most credit card payment processing companies offer several pricing plans for their service to you.

A flat-rate plan for mobile credit card payments is great if you’re starting out and only expect to earn several thousand dollars a month. The plan charges you a set percentage of each transaction, somewhere around 2.75 percent, for example. You may also be charged a small transaction fee of around $0.15 per transaction. Some flat-rate plans also charge a monthly fee.

A tiered-pricing plan is similar to the flat-rate plan but gives you different rates based on the type of credit card used at the point of sale. Debit and credit cards have the lowest rates. Then, the rates go up for rewards cards. The highest rates are for corporate credit cards and cards that aren’t at the POS, but rather, keyed in by you. This would happen for a phone sale, for example.

An interchange-plus pricing plan is based on pricing that the processing company has to pay to the credit card companies. The percentage is based on the profit the processing company makes. Merchants often say this plan is most transparent but also the most complicated. Do the math before you sign up for a mobile credit card payment plan.

Signing Up for a Plan

To sign up for a processing plan and get started accepting mobile credit card payments, you generally must fill out an application first. Most payment processing companies have a downloadable application on their website.

You will be asked the basics about your business, like tax ID and company status. Once verified and approved, you will let the company know where you want your funds deposited.

For your basic plans, this should take only a few days at most. You will then be able to download the company’s processing application onto your smartphone.

You can use a credit card reader that your payment company provides, but make sure it has the chip reader with the EMV technology to protect you and your customers from fraud. If needed, you can purchase a smartphone credit card reader with a separate chip reader to accept mobile credit card payments.

Credit Card Payment by Phone for Your Business

Now that you know the basics of how to set up credit card payment by phone, you’re ready to get the app, processor, and plan that best suits your needs.

To start, get in touch with us by phone or on our website so we can take a look at your business and help you select the best mobile credit card payment solution. We’re here to answer questions and make it easy for you to boost your profit margin by being able to efficiently accept payments from customers wherever you go.

Right payment solution for you infographic

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