Being able to accept credit card payments on the go opens up a world of possibilities for retailers. Learn about current options and decide which one is right for your small business.

Although much more popular in Asia and Europe, mobile payments are up and coming in the US. With your smart phone, you can download an app or attach a small card slider and read credit cards for payments, just like you would with a credit card machine.

Consumers like this flexibility, as it means they do not have to carry cash, and can make more purchases and charge them to their credit cards, debit cards or cell phone bill. As we all carry our phones with us, the mobile phone is becoming a “digital wallet” of sorts.

Who They’re Good For

If you are a retailer and sell goods on the go, like at a farmer’s market or festival, taking a credit card machine, plugging it in and finding an internet or phone connection can be difficult. Your other solution has been to write down credit card info and run the cards later, but there are always errors with that system.

Now your phone can help you take charges on the spot, resulting in more revenue and fewer errors in accounting. Here are some examples of where mobile payments can come in handy:

  • Selling crafts at a fair with no electrical outlets
  • Selling ice cream from ice cream truck
  • Selling produce or other goods at farmer’s market
  • Table-side checkout at restaurants
  • Small store without internet or phone service
  • Door-to-door sales

Is It Safe?

Many business owners are understandably concerned about mobile payment security. The truth is, it’s as safe to take payments over a mobile phone as a credit card machine. There are several safety certification systems in place that mobile carriers require before backing a mobile payment system, such as Payment Card Industry Data Security Standards. (PCI DSS). These standards ensure that the sensitive data is not compromised in a transaction.

Types of Mobile Payments

Card Swipers

Just like you would swipe a card on a credit card machine, there are mobile payment apps that use a small card reader that attaches to your phone, allowing you to swipe card information for a customer.

Input the sale on your phone, swipe the Visa, Mastercard, American Express or Discover Card, and the transaction is immediately processed.

Companies offering mobile card readers:

SMS Payments

Another payment method for smart phones is via text messaging. Your customer enters your phone number at the checkout process, receives a text confirming the purchase amount and completes the transaction by replying “yes” to the text.

Charges may go directly to the customer’s credit card or bank account, or may be added to their cell phone bills.

Companies offering SMS payments:

Application Based Payments

Some mobile payment providers have created their own applications to use for payment processing. These providers must be connected to merchants, so if you elect to accept payments through one or more, be sure your customers are already using it.

Companies offering app-based payments:

The Last Word on Mobile Payments

Accepting mobile payments may help you increase sales, as people often do not carry cash with them when on the go. Let’s say you sell crafts at the local farmer’s market. How many times have people looked at your products and left sadly because they didn’t have the cash to buy them? Now setting up a sign that announces you accept credit card payments will immediately boost sales.

You can also decrease accounts receivables. If you send invoices and are waiting for people to send in their checks or credit card information via mail, you can now process their cards in their offices or stores, making it convenient for both parties, helping you get paid faster and saving a stamp.

Currently, credit card processing fees vary, depending on the provider, but are still very competitive with credit card processing machines. Keep in mind that the cost to get started is much lower, at zero or under $100, compared to any up front fees for the credit card processing machine and service.

The mobile payment market is only beginning to flourish in the United States. Look for more solutions and lower fees as more competitors enter the market.