Best Credit Card Readers

Updated October 2020
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Buying guide for best credit card reader

As a business owner, one of the most important decisions you’ll make is which forms of payment your establishment will accept. If you own a credit card reader, you can accept credit cards and gift cards. You can also swipe debit cards, loyalty cards, key cards, and identification cards.

A credit card reader is capable of reading cards with a magnetic stripe containing personal and account information. When you swipe a card in the reader, payment registers and processes with your point-of-sale (POS) system. With some readers, this information loads into your desktop software. With others, it uploads to a companion app. The transaction is also transmitted electronically to the client or customer’s credit card company or financial institution. 

If you’re ready to expand your payment options, take a look at our buying guide on credit card readers. Our overview of basic features and popular types of readers will make your choice a simple one.

Even if you’re investing in a terminal or software-driven credit card reader, it’s a good idea to invest in an app-driven reader as a backup. That way, if you experience a power outage or your regular reader malfunctions, you can still accept mobile payments.

Key considerations

Encryption

Information security is paramount, which is why it’s generally recommended to choose credit card readers that are encrypted. This means the reader is equipped with security precautions that minimize the possibility of credit card theft. 

While it seems like encryption should be a standard feature in credit card readers, it’s not. Luckily, encryption is not considered a “premium” feature that drives up the price. In fact, many budget-friendly credit card readers cost less than readers without encryption. 

Chip reader

Over the last decade, many credit card issuers and financial institutions have adopted credit cards with embedded microchips for added security. The “chip” is a tiny metallic emblem located on the side of your credit card. It contains additional identifying information about your card, making it harder for thieves to reproduce it and use it. 

Some credit cards also require a PIN from the credit card holder to complete transactions. If payment isn’t approved by the issuer or financial institution, the payment is immediately denied in the credit card reader. 

If having a chip reader is non-negotiable for your business, keep in mind you’ll end up paying more for this premium feature. For the most part, chip readers are usually found in all-in-one terminal readers, which tend to be the most expensive types of credit card readers.

Receipt printing

As more businesses go paperless, it comes as no surprise that many credit card readers don’t print receipts. Rather, these readers are connected to software or an app that sends receipts to patrons via email

Traditional card readers, namely terminal readers, print both merchant and customer receipts. They’re usually capable of printing end-of-day reports as well as other information related to credit card transactions. Receipt paper is usually thermal, which means additional heat exposure will degrade the printout. 

Contactless payment

Some credit card readers offer contactless payment, in which a chip credit card or smartphone is waved across the reader pad. Once the chip is read via NFC (near-field communication), a series of lights or beeps indicates that the payment has been processed. Only late models of certain credit card readers are equipped with this feature, so be prepared to spend a little more for it.

Fees

As a business owner, you’re subject to a series of fees for every credit card transaction you process. For some business owners, it’s a considerable amount of money, which is why some stick to cash and checks.

When you begin using a credit card reader, you’ll need to pay interchange, assessment, and processing fees to your payment processor. The fees vary considerably between processors, but it may cost you between 1% and 3% per transaction in addition to a flat rate service fee. This ends up cutting into your profit if you decide to swallow the fees. Some retailers charge more for their products and services to compensate.

Types of credit card readers

If you’re not sure where to begin, first examine your point-of-sale (POS) setup. You may wish to choose a credit card reader that seamlessly integrates with your POS, in which case you’d use the software and devices you currently have. On the other hand, you might be motivated to upgrade your entire POS to create a more streamlined payment process.

Terminal readers

Terminal card readers are your best option if you’re looking for an all-in-one solution for credit card processing. Not only do they allow you to swipe credit cards, many terminals also come with chip readers, signature pads, and a number pad. While some of these are connected via telephone cables, many have WiFi connectivity and expandable storage options. Given their added security features and overall capabilities, terminal readers tend to be more expensive than other readers.

Software-driven readers

Software-driven credit card readers consist of the reader and nothing else; these devices exist merely for the swipe. All information and processing is done through software, which is either standalone POS software or integrated with business management software. These readers are typically connected via USB as opposed to telephone cables. However, some newer software-driven readers are wireless and Bluetooth-enabled.

App-driven readers

Merchants who conduct business outside of traditional brick-and-mortar stores often accept mobile payments through app-driven readers. Rather than being hardwired indoors, most of these models simply connect to your smartphone or tablet with a jack. These readers are often produced by payment processors like PayPal and Square, as they correspond with their companion apps and online platforms. 

Did you know?
Many app-driven credit card readers can send receipts to customers in multiple ways, such as via email, text, or alerts from an app.
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Credit card reader prices

Credit card readers cost anywhere from $9 to $900. The more high-tech features you need, the more you’ll end up spending.

Inexpensive: Entry-level readers driven by software or an app cost between $9 and $50. They’re ideal if you’re short on space and sticking to a budget. If you need to purchase more than one credit card reader, the low price may appeal to you all the more.

Mid-range: The price range from $50 to $300 encompasses a variety of terminal readers. These include models that accept chip cards and models with signature pads. Readers that print receipts may come with a few rolls of tape to get you started.

Expensive: Between $500 to $900, you’ll find advanced POS systems that involve device docking. These readers function as full-blown registers and often have well-developed and customizable software.

Tips

  • Talk to customers before you buy. Ask customers what their preferred method of payment is and why. Their answers will help you choose the right credit card reader.

  • Crunch the numbers. The cost of doing business adds up when you accept credit cards. Crunch the numbers to determine what your options are.

  • Set up the credit card reader on a day off. There’s nothing more frustrating to customers than when the POS is down and they’re in a rush. Run a few practice transactions with your credit card reader to iron out any kinks before inviting customers to use it.

If your terminal reader accepts chip cards, use a can of compressed air to remove dirt from the slot. You can also use the air to remove dirt that accumulates around the receipt wheel.

FAQ

Q. Are credit card readers compatible with Macs?
A. Some, but not all, credit card readers are compatible with Macs. Note that some credit card readers only work with certain types of software — and that software may not be compatible with Macs, either. Also note that app-driven credit card readers are generally compatible with most recent iOS versions of iPhones

Q. Besides accepting payment, what else can credit card readers do?
A. Some businesses use credit card readers as a way to scan in employee ID for the timeclock. Readers can also be integrated into software with loyalty programs, in which businesses simply swipe loyalty cards instead of manually looking up customer information. 

Q. How long will a credit card reader last?
A. Most credit card readers can withstand two to four years of heavy use. Some manufacturers actually cite how many swipes a reader can handle before requiring replacement. The number can be as high as 500,000. 

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