The Best Way to Take Payments With Your iPhone

If you do business on the go, you need to have some way for customers to pay you for your products or services. If you have an iPhone or iPad, you're in luck. There are various ways for you to use it to accept payments. You'll need only three things aside from your iPhone:

1. A credit card processor that supports mobile payment processing
2. An iPhone credit card reader from that credit card processor
3. An iPhone app that interfaces with your account and the mobile credit card reader

Since the credit card processor you choose will provide both the iPhone credit card reader and the app, choosing the processor is the most important step. 

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iPhone card reader comparison

When it comes to mobile credit card processors, you have many choices. Some of them have their own proprietary iPhone card readers, while others use third party-hardware. The iPhone card readers connect either by plugging into the headphone jack (for older iPhones) or the Lightning charging port, or via Bluetooth for newer or wireless devices. Here is a roundup of the top mobile payment processors and their iPhone card readers.

Here is more information on each option.

Clover Go

The Clover Go mobile credit card reader is available from the payment processor Clover (see our full review of Clover credit card processing). Clever Go is able to accept magnetic stripe (swiped), chip (inserted) and NFC (tapped) cards, as well as digital wallets like Apple Pay and Google Pay. It is compact and connects to your iPhone via Bluetooth. It interfaces with the robust Clover Go mobile payment app and costs $49. Transactions process in real time over Wi-Fi or later for situations in which Wi-Fi is not available. 

Here are the costs for Clover Essential (the most basic plan):

• Monthly fee: $9.95
• Transaction fee: 2.6% plus 10 cents per transaction for card-present transactions with reader

Square

The Square Reader for contactless and chip is from credit card facilitator Square. Learn more in our full review of Square. It is compact and utilizes Bluetooth. While it allows you to accept chip cards, NFC cards, and Apple Pay and Google Pay, it cannot take cards that have only a magnetic stripe with no chip or NFC capability. It costs $49 and interfaces with Square's POS software, which lets you not only see your sales transactions, but also manage inventory, issue digital receipts and manage customers.

• No monthly fee
• Transaction fee: 2.6% plus 10 cents per transaction for card present transactions with reader

PayPal Zettle

PayPal is another credit card facilitator, which means you don't have your own merchant account, but instead are a sub-merchant under PayPals umbrella merchant account. You can learn more in our PayPal credit card processing review. Unlike the Clover Go and Square Reader, the PayPal Zettle iPhone credit card reader has a numeric pad where customers can enter their debit PIN. It accepts chip, tap and swipe transactions, as well as PayPal, Venmo, Apple Pay, Samsung Pay and Google Pay. It utilizes Bluetooth wireless technology and integrates with PayPal's Zettle app. The app integrates with their free Zettle POS software, which makes it a good solution for businesses that have a brick-and-mortar location and mobile sales. The first PayPal Zettle mobile card reader for iPhone costs $29; additional units cost $79.

• No monthly fee
• Transaction fee: 2.29% plus 9 cents per transaction for card-present transactions with reader

Helcim 

The Helcim iPhone card reader allows you to accept swiped, chip and NFC card transactions, as well as Google Pay and Apple Pay. It also has a numeric pad for PIN input. It connects via Bluetooth and can interface with Helcim credit card payment POS software (see our full review of Helcim credit card processing) on iPhones, iPads and laptop computers. Helcim POS software includes automatic tax calculations, inventory management and customer data. The Helcim card readers are $199 each.

• No monthly fee
• Transaction fee: Interchange-plus pricing, so it varies, but the average is 1.92% plus 8 cents for credit card-present transactions and 0.91% plus 8 cents for debit card-present transactions with reader.

Payanywhere 3-in-1

The Payanywhere 3-in-1 reader looks a lot like the Clover Go and Square readers. It does not have a numeric pad and accepts magnetic stripe, EMV and NFC cards, as well as Apple Pay and Google Pay. It can connect with your iPhone, tablet or laptop via Bluetooth, and it costs $49.95. The Payanywhere app enables you to add tip amounts or percentages and accept signatures for additional security, and it can send digital receipts or kitchen tickets for food service businesses.

• No monthly fee
• Transaction fee: 2.69% per transaction for card-present transactions with reader

SumUp Plus

The SumUp Plus reader accepts all three types of card payments (swipe, tap and chip), as well as Apple Pay and Google Pay, and it connects via Bluetooth. It also features a PIN pad on the back for debit cards. It boasts of the longest battery life (up to 500 transactions per charge) and is also the most affordable at only $19. The accompanying app allows you to manage products in your catalog, assign tax rates and send digital receipts. If you have multiple employees, you can see the sales that each one generates.

• No monthly fee
• Transaction fee: 2.75% per transaction for card-present transactions with reader

Benefits of accepting mobile payments

If you have a business that is inherently mobile, then accepting payments on the go is critical. Since few people now carry checks or much in the way of cash, mobile businesses need to be able to accept payment with an iPhone credit card reader and software. However, even if you have a business at a fixed location, you might want to consider accepting mobile payments. 

Speeds checkout lines

Say you have the kind of business where customers need to line up to pay at a cashier. If there is a long line, customers may decide that it is not worth their time to stand in line. In fact, 86% of U.S. consumers say they have left a store because the line was too long. Some businesses, such as Chick-Fil-A, increase their efficiency, and thus their sales, by sending cashiers to the customers standing in line to process their orders with mobile payment devices.

Improves flexibility

Even if the majority of your business is done in-store or online, an iPhone credit card reader and app give you the flexibility to try different ways of selling. For example, if you have an Etsy shop selling handmade goods, you could also participate in art shows. Clothing retailers could try setting up a pop-up shop, and restaurants could delve into the food truck or event space.

Boosts closing ratios

If you do in-home sales that require a deposit, having the ability to accept payment while your salesperson is with the customer can improve your sales closing percentage. The time when a customer makes the decision to buy is the optimal time to collect payment so that the sale is moving forward toward completion.

What is a credit card processor? 

A credit card processor is a company that enables businesses to accept credit cards. Some payment processors also let you accept forms of payment such as Venmo, PayPal, Apple Pay and Google Pay. The more types of payment you are able to accept, the more convenient it will be for your customers, and the more sales your business will likely make.

There are multiple ways to accept credit cards; the one you use will depend on how you do business. 

• Brick and mortar: These are retail stores, restaurants and other businesses that primarily take payments in person at a fixed location. They typically use a point-of-sale (POS) system with an integrated or external hardwired credit card reader and POS software or the basic payment software provided by the processor.
  
  
• E-commerce: For strictly e-commerce businesses, credit cards are usually processed without hardware, with payment web forms directly interfacing with the payment software.
  
  
• Phone and mail: If your customers give you their credit card information over the phone or through the mail, you will usually just need a software interface called a virtual terminal into which you will type the customer's payment information.
  
  
• Mobile: If all or part of your business is done outside of a fixed location, such as a food truck, vendor at farmers' markets or in-home services, you will need a mobile device-enabled credit card reader and a mobile payment app.

Bottom line: A credit card processor is a company that lets businesses accept credit cards. The best credit card processors make the process simple, offer multiple ways to accept payments and don't charge an arm and a leg.

How much does it cost to accept credit cards? 

Like all business services, credit card processing has a cost. Since the cost of accepting credit cards directly impacts your bottom line, it is one of the most important criteria when choosing a payment processor. There are multiple payment processing companies, each with different rates and fees, different criteria required to open an account, different iPhone credit card readers, and different mobile apps. There are three types of costs involved, although not all payment processors have all of them. 

Transaction fee

A transaction fee is charged by all payment processors and is a percentage of the total purchase amount. Some processors also charge a flat amount per transaction. Transaction rates range between 1.5% and 3.5% plus 10 to 30 cents per transaction. Businesses with a lot of small transactions will ideally look for a rate with no flat per-transaction fee or a very small one. Companies with fewer but higher-dollar-amount ticket sales will pay the least if the transaction fee is a lower percentage, even if the flat amount is higher.

Usually, payment processors have different transaction fees depending on how the payment was made. Transactions that are more susceptible to fraud like e-commerce or card-not-present transactions will be charged at a higher rate than more secure ways of paying, such as in person with a credit card reader.

Some payment processors have an interchange-plus pricing model. This means that they take the interchange rate that is set by the card networks (Visa, Mastercard, Discover and American Express) and add a markup on that rate. Interchange rates vary widely, from lower rates on debit cards used with a PIN to higher rates on corporate rewards credit cards.

Monthly fee

Some credit card processors charge a monthly fee that covers at a minimum customer service and monthly statements. This fee may include other services such as PCI security compliance and payment gateway charges. Processors that charge monthly fees usually have lower transaction rates and therefore may be a good choice for businesses with higher sales volumes.

Incidental fees

Most payment processors charge incidental fees when certain specified events (that are outlined in the contract) occur. For example, you are likely to be charged a fee when there is a chargeback or if you do not meet your security requirements.