9 Reasons Your Small Business Needs to Start Accepting Card Payments by a Phone Credit Card Reader App
We are increasingly moving toward becoming a cashless society. According to a July 2020 report by the Federal Reserve Bank of San Francisco, only about 23 percent of the US population prefers to pay by cash. And that number is based on research conducted before the novel coronavirus turned our world upside down.
If the consumers’ love affair with cash was dying before the COVID-19 pandemic, the ongoing health crisis could very well serve as the final nail in the coffin. As a small business owner or an independent service provider, you would have noticed this trend as well.
With a heightened focus on hygiene, customers no longer prefer to carry or handle banknotes and coins that exchange multiple hands. This is why the economies that have traditionally been cash-based, such as Japan and Germany, are also witnessing a cultural shift in people’s payment preferences.
If there ever was a time to start accepting credit card payments and make your business more lucrative to customers, it’s now.
Credit Card Readers for Your Small Business
Traditionally, millions of small business owners and service providers such as plumbers, electricians, painters, cosmetologists, hairdressers, therapists, food truck owners, etc., have shied away from accepting non-cash payments because conventional credit card terminals and point of sale (POS) systems are bulky, expensive, and difficult to handle.
But, today, technology allows you to convert everyday mobile devices, like smartphones and tablets, into a nifty yet powerful mobile point of sale terminals (mPOS).
A mobile credit card reader is a compact device that fits right into your pocket. It can either be plugged directly into your mobile device’s headphone port or connected via Bluetooth. A credit card reader app gets the device up and running. And as such, any small business that has access to reliable Wi-Fi coverage or mobile network, can start accepting electronic payments in a jiffy. This simple pay-as-you-go solution has opened the doors to several advantages for small business owners and service providers.
9 Reasons to Get a Mobile Card Reader
The benefits that a phone credit card reader can bring to your business are too big to ignore:
1. Provides Convenience and Accessibility
Using a card reader for phone allows you to conduct transactions and accept payments anywhere, anytime. It doesn’t matter whether you are making a house call, operating out of a pop-up store in a mall, or doing business from a non-traditional space. Credit card readers for your small business are incredibly easy to use and offer unparalleled convenience and accessibility to both the seller and the buyer.
2. Reduces Wait Times
In a world where people have become accustomed to instant gratification, long wait time at checkout is off-putting for most customers. When a client is ready to go (or see you off, in case of a house call), it is imperative that you culminate the experience on a positive note. A phone credit card reader allows you to eliminate the bottleneck of queueing up and going through lengthy cash exchanges, and provides unprecedented flexibility over the traditional bill settlement process.
3. Widens Your Customer Base
Shopping at your store or availing your services should not translate into an additional trip to the ATM for your patrons. By offering a wide range of payment options, you can widen the pool of your potential customers. If a client doesn’t have cash on hand, they may not come back to your ‘cash-only’ business. This is especially true for Gen-Z and millennials whose aversion for carrying cash is no secret. In fact, they consider the stores that don’t offer card payments ‘old-fashioned’. This kind of testimony in the form of an online negative review by a young consumer can harm the reputation of your small business. By using a phone credit card reader to allow customers to pay with a method of their choice, you are telling them that you value their patronage.
4. Opportunities to Sell More
A credit card reader for iPhone or any leading Android phone gives you opportunities to up-sell and cross-sell products. For example, a hairdresser armed with a mobile card reader, helping a customer buy a specialty shampoo right from the shop floor, can easily make personalized recommendations for the hair masque sitting on the next shelf. Further, customers are more open to making larger purchases when they know they will not be restricted by the cash in their wallets. Clients are also more likely to leave larger tips when they are offered a mobile card reader to settle their bills.
5. Improves Customer Retention
Seamless payment processing and allowing patrons to pay via their preferred payment method go a long way toward improving customer satisfaction. And satisfied clients always come back with repeat business, leading to brand loyalty and improved customer retention. A card reader for phone or tablet device lets you meet and communicate with your customers right where they are, and give them your individual attention when they need it the most. This, in turn, translates into loyal customers recommending your business to their family and friends.
6. Gateway to Contactless Payments
As many small businesses and service providers have learned over the last few months, offering contactless payment options to customers becomes a necessity amidst a global health crisis. Not only does a next-gen mobile card reader device support card swiping for transactions but it also allows for contactless transactions by accepting EMV (chip card) and NFC (contactless) payments (more on this below). All a customer has to do is tap the card against the mPOS terminal or simply wave their credit card in front of it. There is no need to pass payment cards back and forth.
7. Adds a Professional Touch to Small Businesses
For any new customer trying out the services of a small business for the first time, the logos of the payment options they see at the storefront sends out a signal of legitimacy and instills a sense of confidence in them. Clients feel that a business is well-established and trustworthy when it offers the comfort and convenience of multiple payment options through a credit card reader app.
8. Online Record-Keeping for Customer Management
By using a credit card reader for iPhone or Android devices, you always have a clear and transparent record of transactions. Forward-looking small businesses can use this information to better manage customers and send out timely service reminders. For example, a health-food business can prompt a patron to refill their protein shake stocks on the 2nd of every month or a cosmetologist could send a reminder to a client to get a follow-up procedure on their last skincare ritual.
9. Protection from Physical Costs of Maintaining Cash
Some small businesses are wary of getting a mobile card reader because they are concerned about transaction and processing fees associated with credit card readers. The truth is, there are several costs associated with maintaining physical cash as well.
These include the costs associated with preparing or coordinating deposits, requiring change throughout the working hours, costs of auditing tills, costs associated with theft, fraud, or cash that disappears in the process, as well as back-office and banking charges. A credit card reader protects small businesses from all these hidden costs of doing a cash-only business and saves a significant amount of time that goes into counting cash and reconciling books.
Before Buying a Mobile Credit Card Reader
By boosting your bottom line, the right mPOS system could be key to the growth of your small business. If you’re just starting out on the journey to accepting credit card payments, you would want to invest in an advanced device that supports EMV and NFC payments, and will futureproof your small business.
What is EMV and why should it matter to small businesses?
EMV stands for Europay, Mastercard, and Visa – the global standard for credit card security. These cards come embedded with a small computer chip that encrypts bank information each time a transaction is initiated, making them far more secure than traditional credit cards whose magnetic stripe could easily be duplicated to steal personal data.
To process an EMV transaction, you need to insert the card vertically – chip first – into a mobile credit card reader instead of swiping it horizontally on a magstripe reader. Some chip cards are even equipped to be ‘contactless’ or ‘tap to pay’, taking away the need for the card to exchange hands.
Even as EMV cards save customers from fraud, a small business has an even bigger incentive to make sure its credit card reader for phone supports EMV transactions – it helps you avoid financial liability. If an in-store transaction is done using a stolen or forged chip card, consumer losses from that transaction fall back on the payment processor or issuing bank and not on the owner of the small business where the card was misused.
Customers place greater trust in businesses that accept EMV card payments through a mobile card reader because they know you are complying with global laws and regulations. Read more about the benefits of installing an EMV card reader device here.
What is NFC and how is it used to pay for things?
NFC is an acronym for near field communication – the technology that allows two devices to talk to each other when they are placed in proximity. In terms of the payments ecosystem, these devices are your smartphone and the mobile card reader. Leveraging radio frequency identification (or RFID) tech, NFC has become an increasingly popular way of conducting contactless and touch-free payments.
Payments are triggered by holding a smartphone a few centimeters away from a credit card reader for phone and allowing the devices to communicate wirelessly via a special radio frequency. Some of the popular NFC payment methods include Apple Pay, Android Pay, and Samsung Pay.
At 175 million, the United States has the most contactless cards of any market globally, according to Visa. And it’s not really surprising that the overall contactless usage in the US has grown 150 percent since March 2019.
Since they are completed within a matter of seconds, NFC transactions are leagues faster than processing cash payments. In fact, they are faster than using a magnetic stripe or EMV credit card as well. Moreover, NFC payments are encrypted and secure, often enjoying an extra layer of protection via the phone’s biometric sensor.
One of the most significant factors that have led to the rapid progression of NFC payment methods across the world is that it has abolished the need to carry a physical wallet every time you step out. With Gen-Z and millennials relying on mobile devices and smart watches to take care of their every need, the adoption of a contactless, mobile payment option comes naturally to them.
For a small business owner, a credit card reader app that seamlessly integrates with mobile wallets provides the perfect opportunity to reward regular customers with loyalty discounts, daily specials, and other benefits.
To know more about how your business can benefit from a phone credit card reader that supports NFC payments, click here.
Don’t get left behind
Finding and winning new customers, and retaining the old ones, is a never-ending process for any small business owner or service provider. If you don’t accept credit cards or contactless payment options yet, you run the very real risk of alienating customers and losing out on business growth.
Even before the COVID-19 pandemic spread and made consumers across the globe wary of cash transactions, multiple customer surveys had proven that people choose or recommend businesses based on their ability to pay with plastic for their transactions.
This means you need to equip your business with a mobile point of sale (mPOS) system that accepts not only credit cards but also contactless payments via mobile wallets. Credit card readers for your small business must check the three Ss:
- Simple: The device must be easy to install and use
- Swift: Speed is the key to customer satisfaction
- Secure: Always invest in a certified mPOS device to ensure reliability
By empowering yourself to accept credit card and contactless payments anywhere, you offer customers the convenience and flexibility they desire to do repeat business with you. Accepting multiple payment methods widens the pool of potential customers for your small business, and you get more opportunities to cross-sell/up-sell products and services.
Positive word-of-mouth publicity from loyal customers can further shore up your profits as you utilize online payment records to better manage your customers. Even more importantly, a phone credit card reader can save you from the multi-faceted hidden costs and the persistent threat of theft that come with managing all-cash tills.
Now that you know why a mobile card reader is essential for the profitability and growth of your small business, get started today.