A credit card reader is a device that lets you take payment in-person by swiping the magnetic strip on a customer’s card. Credit card readers read the information stored on this strip to communicate with the payment network. The network then authorizes the transaction and transfers money from the customer’s bank account to yours.
If you plan to sell anywhere in-person, it’s beneficial to take a card reader with you. Most modern consumers are cashless; some 41% of Americans say none of their usual weekly purchases are paid for in cash.
Credit card swipe transactions are more secure than cash, and their digital nature makes them easier to track. That’s a huge time saver when it comes to tax season and financial reporting.
So, how do you choose a card reader that allows you to process credit card swipes? This guide rounds up the best options, things to consider when shopping for yours, and how to navigate the complexities of credit card swipe fees.
Best credit card readers for small businesses
Shopify
Shopify has a line of credit card readers that integrate seamlessly with the Shopify point of sale (POS) system. You can open the Shopify POS app, connect your card reader to the device, and start taking credit card swipes from customers wherever you sell.
Popular options include:
- POS terminal: A countertop reader with a customizable customer-facing display. It connects via Wi-Fi or Ethernet cable, so you can take card payments at the checkout desk.
- Tap to Pay: A tool that turns your iPhone into a mobile POS and card reader—no extra hardware required.
- ShopifyPOS Go: A separate handheld device that acts as a POS terminal, barcode scanner, and credit card reader in one.
Payments made through either Shopify POS card reader will be processed through Shopify Payments. Rates for this payment gateway start at just 2.4% plus 0¢ per transaction, and there are no extra fees for customers who want to use Shop Pay Installments. You can process payouts to your bank or PayPal account within just a few days.
Square
Square is a POS system that offers credit card readers for businesses that want to accept payments in-person. Its signature offering, the Square Terminal, is a small battery-powered device that accepts magstripe cards, contactless payments, and chip and pin transactions. It integrates with the Square POS system and apps that are compatible with desktops and smartphones.
Square has a set payment processing fee of 2.6% plus 0¢ per credit card transaction. If customers choose to pay in installments with Afterpay, this amounts to 6% plus 30¢ per transaction. It promises next-day payout terms for qualifying transactions.
Clover
Clover is a POS system designed for small businesses. It offers multiple card readers, including Clover Flex, a battery-powered handheld device with built-in Wi-Fi and 4G connectivity built in. You can use it to process credit card payments from major banks like Visa, Mastercard, American Express, and Discover.
Clover charges 2.6% plus 10¢ per transaction if the card is tapped, swiped, or inserted. It takes a few days for your money to be paid out, but there’s an optional 1.5% fee to get your funds sooner.
Toast
Toast is a POS system specifically designed for restaurants. Its card readers and payment processing capabilities work online or offline, so you’re protected even during an internet outage.
Toast’s payment fees aren’t very clear; rates are custom-built and personalized for every restaurant. For an accurate picture of costs, you'll need to contact Toast's sales team.
PayPal Zettle
Formerly known as iZettle, PayPal acquired this POS system as a way for its merchants to get paid in-person. It offers mobile card readers, a POS terminal, and a full POS checkout system.
Customers can swipe their card on a Zettle card reader and see the funds in their PayPal balance within minutes. Or, if you’re using Shopify’s ecommerce platform to operate an online store alongside in-person sales, you can use the Shopify integration to process payments in-person with the Zettle mobile card reader.
Zettle has a fixed transaction fee of 1.75% for card and contactless payments. This applies to all types of cards, including American Express (regarded as the most expensive for interchange fees).
What’s the deal with credit card swipe fees?
Banks charge businesses a credit card swipe fee whenever they accept this type of digital payment. It’s standard practice for the merchant to absorb this fee as a business expense so the customer doesn’t experience unexpected charges when they swipe their card.
These credit card swipe costs, also known as interchange fees, vary depending on the bank or card network. Some charge flat fees per transaction; others take a percentage of the total money that’s being processed. The latter is more common and can range between 2% and 4%. Visa and Mastercard are considered to be the most affordable, whereas American Express tends to be on the higher end.
Types of credit card processing machines
Mobile card readers
A mobile card reader is a portable device that allows you to accept credit card swipes anywhere. The devices usually have a screen and require an internet connection, such as Wi-Fi or 5G, to process payments. Most mobile card readers allow you to accept various payment methods, including credit cards, mobile payments, contactless, and chip and pin.
Handheld terminals
A handheld terminal works similarly to a mobile card reader in the sense that you can accept multiple payment methods and move the device around to process payments on the go. The main difference is that handheld terminals usually have a customer-facing screen. You can use this to display their order, show gift card balances, or give the option to add a tip.
Countertop readers
A countertop reader is a fixed device tied to your checkout desk. It’s hardwired to your POS system through a USB cable (or to an Ethernet connection) and doesn’t have a screen, hence why it’s most commonly used in permanent brick-and-mortar stores.
POS registers
A POS register is a fixed device that sits on your checkout desk. Instead of needing separate devices to ring up orders and process credit card swipes, a single POS register can handle both. It’s a good option for retailers with a brick-and-mortar store who don’t want the hassle of maintaining multiple devices.
How to choose a card reader
Costs
How much does it cost to buy a card reader to accept credit card swipes? Startup companies might not have the cash to invest in a full-scale POS checkout, but mobile card readers have a lower barrier to entry due to their lower upfront cost.
Similarly, check that any flat-rate credit card swipe fees don’t absorb all of your profit in lower-value transactions. If your chosen provider takes a percentage, confirm that you’d be happy to subtract this from your profits when customers choose this payment method at the checkout desk.
Mobility
If you plan to sell outside of a permanent location, consider how portable your card reader is. A mobile card reader allows you to sell anywhere, at any time—be that at a pop-up shop, a food truck, a farmer’s market, or a special event.
Even if you have a permanent store, mobile card readers bring the checkout process to the customer. This can reduce queues in stores even with a fixed countertop because you can take your card reader around the store, rather than forcing customers to come to a fixed point of sale (such as your checkout desk).
Features
Even if you don’t need a specific feature from your card reader right now, think ahead and anticipate what you might need in the future. Choosing a card reader that can scale as your business does will prevent you from having to repeat the setup process all over again.
This may include:
- Whether it can take payments offline or through a phone connection
- Accepted payment methods, such as chip and pin, contactless, and mobile wallet payments (such as Apple Pay, Google Pay, and Samsung Pay)
- Average transaction speed
- How responsive the company’s customer support team is to resolve issues
Integrations
Before you commit to a new card reader, check that it’s compatible with your existing tool stack. This includes your POS system, barcode scanners, and receipt printers.
Say you’re creating a customer order on Shopify POS, for example. You could integrate a barcode scanner to ring up orders, and then take payment from your card reader. The receipt printer pulls transaction details from this order and automatically prints a paper copy of the receipt to give to your customer.
Security
The Payment Card Industry Data Security (PCI DSS) is a set of compliance standards that payment providers must adhere to to keep customers' data safe. Before investing in a new card reader, check that it is PCI DSS compliant and offers security features like encryption and payment tokenization. This significantly reduces the risk of fraud or data leaks.
Let customers make credit card swipes in your store
Although digital payment methods like contactless and mobile wallets are on the rise, some customers still prefer credit card swipes when they’re paying for goods in-store.
You’ll need a card reader to process those transactions—one that integrates with the POS software you’re already using, is PCI DSS compliant and can scale with your business.
Shopify POS hardware is a no-brainer if you’re already using Shopify POS. The setup process is so simple that you could be up and running within the hour, and discounted payment processing fees leave more money in your pocket.
