3 ways to accept credit card payments

No matter how small the transaction, these days more and more people seem to want to pay electronically rather than hand over cash.

A totally cashless society is still a little way off, offering no consolation to small or mobile businesses losing sales because people aren’t carrying cash.

Refusing to accept credit cards can cost you customers.

The option of using a mobile EFTPOS terminal has been around for many years, but the costs are still prohibitive for some business models once you allow for establishment and annual fees, monthly hardware rental, merchant fees and transaction fees.

Thankfully there are a growing number of alternatives, many of which can operate from a smartphone or tablet and are cost-effective for small merchants. Whichever option you choose, it’s important to read the fine print when it comes to issues such as charge backs over disputed payments.

1. Mobile card readers

Westpac’s Mobile PayWay, the Commonwealth Bank’s Albert and Leo, PayPal Here and Flexigroup’s Paymate OntheGo are among your options for turning mobile devices into a credit card reader. Square is a major player in the US, and it may eventually turn its attention to Australia.

These services all rely on a small card reader that attaches to the mobile device. You’re still faced with various fees, so it’s important to crunch the numbers. But the fact you don’t need to pay for a traditional EFTPOS terminal could make them a more practical option for your business.

2. Smartphone apps

Apart from credit card readers, several financial institutions also let merchants accept card payments via a smartphone app, or via the web browser on almost any device.

Australian options include the Commonwealth Bank’s BPOINT Mobile, NAB Transact, ANZ Fastpay and Westpac’s PayWave Virtual Terminal. MasterCard is also launching a MasterPass trial in Australia, offering an electronic payment system that allows retailers to accept payments via a smartphone app.

The fact that these options are not reliant on specific point of sale (POS) hardware might make them more practical for your business.

You’ll also find a growing number of consumer-focused smartphone apps and services designed to handle mobile transactions. Most aren’t as universal as the credit card system, but it’s worth considering whether they’re a viable alternative for your customer base.

You’ll need to do some research. The bank’s customer-focused mobile payment apps are often designed for transferring money between friends, but not for paying at the register.

Some apps are starting to take advantage of the short-range near field communications (NFC) wireless features built into Android and Windows Phone 8 devices, which let you wave your phone at the counter similar to Visa’s payWave and Mastercard’s PayPass contactless credit cards.

The NFC-enabled Google Wallet works in the US but not yet in Australia. Of course, these payment methods require merchants to have an NFC-enabled terminal, which might not suit small businesses looking to keep things simple.

 3. Mobile transactions

Apart from the financial heavy-hitters, it’s worth considering the new players in the mobile transaction space. PayPal is trialling in-store payments in Australia without the need for retail hardware, letting customers use their PayPal accounts to pay. Local alternatives include iCCPay and QPay.

Meanwhile Australia’s mHIT lets customers pay merchants via SMS. Both types of services have a range of overseas competitors, which are likely to turn their eyes to Australia as mobile payments become more common.