The smartphone industry is a $500 billion industry growing at a rapid rate. These modern devices have the capability to replace other tools and technologies when it comes to business. That’s great news for retailers who want to process credit card payments without investing in expensive hardware.
If you want to accept mobile credit card payments, you need to be aware of a few things. Your card reader needs to be compliant, and the data you’re transferring must be encrypted to protect sensitive payment information.
Whether you’re selling at a permanent store or attending local craft fairs at the weekend, this guide shares how to take credit card payments from a smartphone, with or without a physical mobile card credit reader.
Can you accept credit card payments on a phone?
Any business owner can accept credit card payments from their smartphone if they have a card reader and payment processing provider. Shopify merchants, in particular, can ring up orders on the Shopify POS mobile app and sync their card reader to process mobile payments from their devices. Any revenue you earn goes towards your Shopify payout.
How to take credit card payments on phone
1. Find a credit card processor
The first step is to find a credit card processor compatible with your POS software. Some ecommerce platforms have payment processing built in. Shopify Payments, for example, can process transactions from most credit card issuers including, American Express, Visa, and Mastercard.
Pay attention to mobile payment processing fees when evaluating your options. Most processors charge different rates depending on the credit card a customer uses, so check your order history to see which is most popular amongst customers. Prioritize a processor with low fees for these transactions.
2. Choose a mobile credit card reader
Some smartphones have the technology required to securely take contactless payments from your customers. Shopify POS has its own contactless payment technology, Tap to Pay, that turns compatible iPhones into card readers, limiting the equipment you’ll need to process payments.
If your device or POS app doesn’t have this functionality, or you want to accept a broader range of credit card payments (such as chip and pin), find a card reader that integrates with your smartphone. This will allow people to tap, swipe, or enter their card into a physical card reading machine when paying for goods.
Check that your card reader is PCI compliant and follows EMV standards for chip cards. This encrypts data to keep your customers’ sensitive information (and your money) safe.
3. Sync your ecommerce software
Before setting your heart on a particular card reader, check that it integrates with your point of sale software.
Shopify POS, for example, has its own line of hardware to help you process in-person payments from your smartphone. The app is compatible with Android and iOS devices, and pulls the following data from your Shopify admin to ring up orders more efficiently:
- Product prices and taxes
- Inventory levels
- Discounts or bundles
4. Take credit card payments from your phone
Before you invite customers to pay on your smartphone:
- Do a trial run to double-check that the mobile payment system works.
- Use your mobile app to ring up a mock order (you could create a discount code so the demo transaction only totals 1¢), then use your own credit card to pay.
- Wait for the transaction to be approved.
5. Send a receipt
Receipts come in handy if a customer wants to return their item. They’re documented evidence of what someone has bought, when they paid for it, and how much they paid.
Once you’ve taken a credit card payment using your smartphone, either:
- Email a digital receipt from the Shopify POS app
- Connect a receipt printer to print out a physical copy
How to take credit card payments over the phone
You can take payments over the phone if a customer can’t physically enter their card into a card reader. Here’s how to do it securely.
1. Find a payment gateway
A payment gateway is a secure way of taking payment from customers. If the technology is PSI DSC compliant, it will read and encrypt credit card data so that you can charge a customer’s bank account and transfer the money to your merchant account securely.
Popular payment gateways that allow you to enter credit card information manually include:
- Stripe
- WorldPay
- Authorize.net
- PayPal
Some payment gateways require that you use a virtual terminal to process the payment; others can process credit card payments by keying in a customer’s credit card information in your online account.
2. Integrate your ecommerce platform
Payment gateways often offer enhanced security features, such as tokenization and encryption, to protect sensitive customer data. By processing payments through your ecommerce platform, you can take advantage of these advanced security measures and safeguard against fraud and data breaches.
Integrations also help data flow between your ecommerce platform and the payment gateway. You won’t need to spend time manually reconciling payments, updating inventory, or tracking sales separately when taking payments over the phone.
3. Key in your customer’s credit card number
Once you’ve got the technology set up, you’re ready to accept customer payments. When someone calls to make a purchase, gather their credit card details over the phone, including their:
- Credit card number
- Expiry date
- Security or CVV code
- Billing address
- Postal code
As a business owner, it’s your duty to make sure that any credit card information that’s being transmitted over the phone is protected. Don’t repeat numbers out loud, and never store their details in a place that isn’t secure. You could also encourage customers to key in the numbers on their keypads to prevent eavesdroppers from stealing their information.
4. Authorize the payment
Once you've entered the payment details, initiate the mobile transactions through your payment gateway. The platform will securely transmit your customer’s credit card information to the appropriate card network for authorization.
You'll receive confirmation once this happens. At this point, the payment is considered successful, and you can provide the customer with a receipt or confirmation of their purchase.
Benefits of processing mobile payments
Use equipment you already own
Running a retail business is expensive. Additional equipment isn’t something you need to fork out more money for when you use the smartphone you already have to accept card payments.
Aside from the obvious advantage of saving money, accepting card payments from your phone also limits the equipment you’ll need to take with you. If you sell in-person at craft fairs and pop up shops, for example, you won’t need to take another piece of kit that allows you to process payments. Simply take your phone, the products you’re selling, and a card reader.
Customer convenience
If you’ve got a long queue of customers waiting to buy their products, the last thing you want is to make them wait. The more time they’re in line, the more time they have to second guess their purchase.
Taking payment from your mobile phone speeds up the checkout process because you don’t need to stick to a single POS desk. Your smartphone is portable—if there’s someone in your store who wants to pay for their order quickly or you have an unexpected flurry of customers, you can take your smartphone and help people pay without queuing up.
Accept different payment methods
Depending on the card reader you’re using, taking credit card payments from your smartphone gives customers more flexibility on how they can pay for their order. With Shopify card readers, in particular, you can accept the following payment methods from your phone:
- Chip and pin
- Contactless
- Mobile wallets, such as Apple Pay, Samsung Pay, and Google Pay
It’s more secure than cash
Cash is troublesome for most retail store owners. Not only are you more at risk of losing physical money, but there’s always a risk of theft. Anyone—employees included—can access checkout desks and steal money you’ve taken from customers.
Credit card payments are more secure because nobody can intercept the payment. The money goes straight from your payment processor into your merchant bank account.
Take card payments from your smartphone
If you don’t want to carry around POS hardware when selling in-person, turning your mobile phone into a credit card reader is a smart way to go.
These transactions are more secure than cash, and if you’re using a card machine to process card payments from your phone, it gives customers the option to checkout using their preferred payment method.
