What to Look for in Card Readers for Small Business Transactions

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Credit cards have become a major payment method because of the convenience it offers to consumers who can now go on a shopping spree or dine at a fancy restaurant without bringing along wads of cash.

Since almost everyone has a credit card nowadays, as a business owner, you must keep up with the times and get a card reader for your store if you don’t have this machine yet, or get an upgrade if you’ve been using the same one for a decade.

Here are the things you should consider in card readers for small business transactions:

1.Value for Money

Cost plays a significant role in the equipment you invest in when starting a business.

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There are plenty of expenses that entail this type of venture, and it’s understandable that this factor would have a weightier bearing on your decision.

Stephen from CardSwitcher noted that SumUps’ card reader is the cheapest in the market at 29 GBP or around $37.00.

Square’s reader comes next at $49.99, which is a good price.

Both of which would fit in your small business budget given the output it could generate.

Related: 7 Types of Insurance You Need to Protect Your Business

2. EPOS Features

Since credit card readers are hardware that scans your customers’ cards, you need an electronic point of sale or EPOS software to work with them to complete the transaction.

Most systems do more than just process your customers’ payments. You can find ones that automate business processes such as inventory, customer management, and even employee management by tracking your staff’s logged hours.

You want a device that’s flexible and loaded with features since this saves you time during business operations. It also saves you money because you no longer need to buy another gadget for each process.

Other factors you should determine before buying a card reader are:

  • Accepted Cards – Most card readers work with major credit cards like Visa, MasterCard, American Express, Chase, Discover, Citibank, Wells Fargo and Capital One. Find one that supports what your customers are regularly using.
  • Payment Types – Traditional credit cards use magnetic swipes to process the payment, but it’s being replaced by EMV chips so look for a terminal that can read it. Future-proof your business even more by opting for a device that supports contactless payment methods through cards and other ways such as Google and Apple Pay as well.
  • Processing Fee – Card reader companies keep a small fraction of the customer’s payment as compensation for dealing with the sale. PayPal Here has the lowest processing fee ranging from 1 percent to a maximum of 2.75 percent per transaction. Meanwhile, Square and iZettle charge a fixed rate of 1.75 percent per sale.
  • Funding Time – As a small business, you also need to consider how fast you’ll get the amount for the sale. Most providers guarantee next-day reimbursement for the transactions processed through their device.
  • Client Support – Even with today’s sophisticated technology and devices, there’s still no escaping disconnections and disruptions to your business operations. You must be sure that the card reader provider has a robust after-sales support team who can help you with your questions during down times. Just hours without the ability to process credit card payments can have an adverse impact on your sales, so the issue must be addressed as soon as possible.

Related: Best Business Websites That Are Helping Startups in 2021

3. Security

Credit card safety is a critical factor in ensuring that your business maintains its integrity, as well as the privacy and security of your customers’ information.

You must look for a card reader that is, at the minimum, Level 1 compliant with the Payment Card Industry Data Security Standard or PCI DSS.

The organization works with merchants, financial institutions, and developers to implement their security standards, technologies, and policies, which protect payment systems from theft and breaches.

They have a three-step process for checking a provider’s compliance:

  • Assess – They take stock of the company’s IT assets and business protocols involving credit card processing to evaluate if there are vulnerabilities. They also determine cardholder data or whether the device stores sensitive customer information like credit card digits in their servers. This is an annual process.
  • Remediate – After spotting the weak points of the business processes, the organization works with the card reader provider to fix those vulnerabilities and eliminate the cardholder data storage.
  • Report – Merchants and other business owners report their compliance status with the organization to banks and card brands. Quarterly submission of network scanning may be required while financial institutions have the right to demand other types of documentation. It may be necessary for you to submit a Self-Assessment Questionnaire or a Report on Compliance, depending on the requirements.

Related: 6 Ways to Grow Your Business Fast

 4. Compatibility

If you already have an EPOS system, you must think about the compatibility of your current equipment and the card reader you’ll be purchasing.

They should be able to work seamlessly so that there’s no downtime with your operations at all. It’s also a way to prevent mistakes and errors in calculations, which is crucial since you are dealing with other people’s hard-earned money.

Most terminals support magnetic stripes and EMV chips. You should look for ones that can process payments from iOS and Android devices, while some work with Windows and Blackberry. There are those that connect using Bluetooth as well.

Related: 6 Creative Ways to Finance Your Business

5. Ease of Use

Small businesses typically have to work with few employees. You may not be able to afford to lose days in training them how to operate the card reader, nor can you hover over their shoulders every time they use the terminal to check if they’re doing it correctly.

That’s why you should invest in a machine that has an intuitive layout and straightforward design.

It should be easy to locate the magstripe reader and EMV chip slot. Plus, the sensor for contactless payments must be noticeable enough so that your employees can easily tap the customer’s card and complete the transaction.

Related: 11 Steps to Starting Your Own Business


Buying credit card readers is a substantial investment for your business. You must consider its cost and compare it with the productivity and efficiency you’ll get in return.

Make sure that the terminals support the payment methods and cards that your customers use regularly with minimal transaction fees.

Prioritize its security feature as well, and find one that’s compliant with the PCI DSS.


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About the author

Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.


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