The thought of taking payments with your smartphone may sound like something you’ve seen in the movies, but mobile credit card processing is real and it’s here to stay. Taking payment on a smartphone has quickly become one of the most popular ways for small businesses to process sales. With so many different options available, finding one that suits your business can be tough. If you are considering mobile credit card processing, this guide will help you understand how it works and the benefits of using one to process transactions.
What Is Mobile Credit Card Processing?
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Mobile credit card processing is simply taking payment for products or services through a smartphone or other mobile device that has internet access.
Mobile credit card processing has become increasingly popular with small businesses over the past few years. With so many options available, it’s easy to find an option that will work for your business. Here are a few ways you can use mobile payment services:
- Accepting payments at your physical store location
- Accepting orders or appointments remotely from your customers
- Accepting payments from a customer at the point of sale, such as a taxi or food truck
- Accepting payment for products or services through a mobile website.
Why Use Mobile Credit Card Processing?
Mobile credit card processing is a great option for small business owners looking to increase sales and improve the customer experience. Here are a few benefits of using mobile credit card processing:
Accepting electronic payments provides you with more flexibility when dealing with customers because you can take orders or accept payment from anywhere at any time, as long as there is internet access.
You can increase sales by allowing customers to purchase your products or services from anywhere, including their home or office. This also allows you to sell during off-hours when you are closed for business, increasing potential revenue.
Mobile credit card processing can improve the customer experience because there is no need to wait in line while someone processes a payment with traditional methods.
You can also easily track your mobile credit card processing activity by using an online account management portal with real-time reporting, allowing you to quickly see who is making payments and when. Depending on the option you choose, you might be able to accept payments with different devices or platforms at no additional cost.
Mobile Credit Card Processing Fees
Like any credit card processing service, the fees for mobile credit card processing will vary depending on your business type and which company you use. Generally speaking, however, there are three types of fees associated with mobile credit card processing services: transaction fees, monthly account costs and equipment costs. You might also be subject to some fees if you do not have a merchant account with the company providing your mobile credit card processing services.
Transaction Fees – These are charged on a per transaction basis, just like traditional credit card processing methods. They are usually between 2-3% of the total purchase price.
These are charged on a per transaction basis, just like traditional credit card processing methods. They are usually between 2-3% of the total purchase price. Monthly Account Costs – You will be charged a monthly rate for your mobile payment account depending on which service you use, your business type and transaction volume (it is usually between $10-$40 per month).
You will be charged a monthly rate for your mobile payment account depending on which service you use, your business type and transaction volume (it is usually between $10-$40 per month). Equipment Costs – In some cases, you might have to purchase a mobile card reader or other equipment in order to accept payments. You can find a list of compatible devices here.
No Merchant Account Fees – You might not have to pay monthly account costs if you accept mobile credit card payments through a company that already has a merchant account set up with your bank. However, you will still be charged transaction fees for each purchase.
You Might Have to Pay Additional Fees – Some accounts require an additional processing fee on transactions under $10 or $15.
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Some accounts require an additional processing fee on transactions under $10 or $15. You might be charged for returns – If you need to process a refund, it is usually subject to the same fees as the original purchase which means they will come out of your profits. This can affect you more than most merchants because mobile credit card processing involves direct and immediate contact with your customers.
If you need to process a refund, it is usually subject to the same fees as the original purchase which means they will come out of your profits. This can affect you more than most merchants because mobile credit card processing involves direct and immediate contact with your customers. There might be a minimum fee – If you process a transaction for less than the minimum fee, the company providing your mobile credit card processing services might charge you an “overflow” fee.
If you process a transaction for less than the minimum fee, the company providing your mobile credit card processing services might charge you an “overflow” fee. There might be foreign currency conversion fees – Some companies will charge you additional processing fees if the credit card was issued in a different country.
Some companies will charge you additional processing fees if the credit card was issued in a different country. There might be cancellation charges – If an account is cancelled, you might have to pay cancellation charges, which vary from company to company.
If an account is cancelled, you might have to pay cancellation charges, which vary from company to company. You will be charged for refunds – If your customer requests a refund after the purchase has already gone through, these fees can come out of your profits.
If your customer requests a refund after the purchase has already gone through, these fees can come out of your profits. You might be charged a monthly minimum fee – If your account balance falls below a certain amount, you might have to pay a monthly minimum fee.