Cell Phone Payment Solutions
for Small Business

by Cathy Zimmermann

If you sell at craft shows, conventions, concerts, or anywhere you won't have access to your merchant account system, then cell phone based credit card processing could be just the solution you need. Here's an overview of the options available for mobile credit card processing.

mobile redit card reader
Image source: BigStockPhoto.com

If you own a small business with a brick and mortar storefront, chances are, you accept credit cards for payment, because you know that they increase your sales and reduce your exposure to bounced checks and bad debt. If you have a home business, you may be accepting them through an Internet shopping cart or PayPal.

But what about the many small businesses that are mobile: vendors at antique shows, farmers' markets, rock concerts, art shows, book signings, sidewalk food carts, craft and flea markets? Think about all the service providers who come into the home or office: portrait photographers, plumbers, consultants, contractors, even your babysitter. With the many cell phone solutions that have appeared in the last year or two, small businesses and sole proprietors can accept credit cards anywhere, without having to invest in a bulky and pricey ($400-700) wireless credit card terminal, or resort to the old "knucklebuster" imprinter. Companies that use mobile sales reps or sell at conventions, seminars and trade shows can also benefit from mobile credit card processing.

To accept credit cards, you need a merchant account at a bank, and a payment gateway like AuthorizeNet or PayLeap. Some mobile services will provide you with a merchant account or payment gateway, or both. There are two types of mobile services, those with and without a device to swipe credit cards, but the majority of card readers currently available are designed for iPhones. By law, credit card data is encrypted and never stored on the phone. Most services require an app that is downloaded to your phone. Some apps even allow you to calculate sales tax, add a tip, or send a digital receipt via email or text.

SEE ALSO: How to Get a Merchant Account

Merchant Warehouse

MerchantWARE Mobile does not require a card-swipe device. It works with iPhone/iPod Touch, and is one of the few services that also runs on Android, Blackberry and Windows, with a connection to a Wi-Fi, Edge or 3G network and an app you download right from their website. If you use Merchant Warehouse for your merchant account, there are no gateway or cellular access fees and no contract, termination or annual fees. In business since 1998, Merchant Warehouse has a solid reputation in credit card processing.


Intuit, maker of Quickbooks, Quicken, and TurboTax, teamed with Mophie, which makes iPhone accessories, to offer a product for the iPhone 3G and 3GS. The package, called the Complete Credit Card Solution, consisting of the Mophie Marketplace Credit Card Reader and Intuit GoPayment, is available from Amazon, The Apple Store, AT&T, Intuit and Mophie.

Intuit GoPayment also offers apps separately for Blackberry, HTC Touch Pro, iPod/iPod Touch/iPad and select Motorola, Nokia, Sanyo and Palm devices, as well as a Bluetooth card reader and card reader with printer (not compatible with Apple or Palm.) An Intuit GoPayment Merchant Account is required.

Veriphone Payware

Veriphone is a leader in the payments industry. Slip your iPhone 3G or 3GS into the PAYware Mobile card encryption sleeve and swipe the card through a slot on the side. Enter the amount of the charge in the PAYware Mobile app and have the customer "sign" with a stylus or fingertip on the cell phone screen. The transaction is geo-tagged so you know the exact location of the sale, and you can email a receipt to the customer. VeriFone's PAYware Connect payment gateway is used to process payments, with end-to-end encryption. No other gateway is supported. Merchant account is required and the PAYware app is downloaded from the Apple iPhone App Store.

Simply Swipe It LLC and Macally

Swipe It app uses Macally's QuikSwipe Reader for the iPhone and iPod Touch. Transactions are encrypted before they reach the phone. The nice thing is that the reader cradles the cellular device with a spring loaded system that promises to fit all iPhones and iPods, present and future. Swipe It features on-screen signature capture, email receipts, and a free Virtual Terminal for web-based transactions and online reporting. This service uses the Simply EPay Gateway and will support your existing merchant account or help you set up an account with Axia Payments.

iMerchant Pro is compatible with Authorize.net (and emulators), NMI and iTransact gateways. It can be used with or without their card reader, which is compatible with iPhone 3G and iPod touch 2G and 3G. If you don't have a merchant account and gateway, you can apply through iMerchantPro. 

ROAMPay's card swipe device works with Android, iPhone and Blackberry and plugs into the headphone jack. The ROAMPay app supports over 200 phones for keyed transactions.

Authorize.Net has a list of certified third party solutions for mobile transactions here.  PayLeap recommends iPay POS and Billing Revolution.

Square has been big news since it was announced in December 2009 by co-founder Jack Dorsey (also co-founder of Twitter.) The Square credit card reader plugs into the audio input jack of the iPhone and is not much bigger than a postage stamp. With no contracts or monthly charges, a free card reader, and a promise of "0 to $60 in under 10 seconds," it seems to good to be true, and in fact, it might just be. According to Robin Wauters of TechCrunch, the tiny Square device is now the subject of a legal dispute over the patent. If the matter is resolved in Square's favor, the company could be a major contender in the mobile payments market.

Read the fine print when you compare merchant accounts, gateways and mobile apps. Rates are different for swiped and keyed transactions. When you swipe the card, rather than keying information into a phone, it becomes what is called a "card-present transaction." Because this reduces credit card fraud and manual entry errors, and is therefore less risk for the bank, it will reduce the fees you pay on the merchant account. You may be charged a set-up fee, an annual fee and/or monthly fee, and a fee per transaction. Some services require a contract or use of a particular merchant account or gateway. Take all these things into account when choosing your mobile payment solution.

Copyright © 2013 Attard Communications, Inc.
May not be copied, reprinted, or reproduced without express permission from Attard Communications, Inc.

Cathy is a staff writer and digital media producer at Business Know-How and a graduate student in the Stony Brook Southampton MFA program for writing and digital media.
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