Are you the owner of a small or medium-sized business that accepts in-person payments from your customers? It seems as technology continues to adapt to rising fraud concerns and to accommodate consumer preferences, it’s becoming tougher and tougher for retailers and service providers to decide which card reader is really right for their unique business needs.
Though it might seem complicated, there are really only 3 types of readers you need to concern yourself with if you’re running a brick-and-mortar business that offers customers the option to pay using debit and credit cards. The online side of things can definitely get more difficult, with numerous options to choose from, but that’s a topic for an entirely different post!
Jacek Kotarba, Marketing Manager of SumUp, a company providing credit card readers for small businesses, offers a brief guide on each of the three most common types of card readers available and a brief description of how each works:
1. Swipe Card Reader
Stripe card readers use the simplest data sharing technology available. A magnetic strip on the customer’s card is swiped through a physical terminal allowing them to transfer money from their bank or credit card provider to your business via the payment processor used.
Swipe cards may soon be phased out in favor of the other payment technology on this page. The main reason being how easy they are for a fraudster to replicate. However, swiping is still a popular way to accept payments, and swipe terminals are the cheapest to buy if you’re a small or medium size business.
2. EMV Reader
EMV card reader is currently the global standard for accepting all types of card payments. EMV – stands for “Europay Mastercard Visa” – technology uses an embedded and encrypted microchip in the user’s debit or credit card to store banking data and share it with the reader when making a purchase. Nearly all modern terminals and mobile readers accept EMV payment technology.
Credit and visa debit cards using this technology are essentially only susceptible to fraud when a card-not-present payment scenario is used. For instance when accepting online payments, or when you or your employees take payment information over the phone without using identity verification procedures.
It’s worth noting that if you’re not using an EMV or NFC equipped card reader, you could be on the hook for any fraudulent charges made at your business.
3. NFC Reader
NFC stands for “Near Field Communication” and is often labeled as a “contact-less card reader.” The payment process is slightly faster to that of EMV, but the same principles apply to how secure the transaction actually is. NFC payments can be made from NFC equipped cards, smartphones and other smart devices using RFID (Radio Frequency Identification) technology to transfer payments to a terminal or other payment processing device.
Customers with NFC equipped cards can offer a payment in seconds by “tapping” their chip on your card reader. NFC is fast becoming a popular option with smartphone users too. Consumers need only download an app to their smart device, add their payment card of choice, and they can pay for purchases using any terminal that’s equipped with NFC technology.
Some SMEs might feel NFC is essential to their business, whereas others realize the majority of consumers aren’t quite there yet regarding how much they can trust this kind of technology.
It’s ultimately up to retailers to decide which type of reader is right for their business needs. Considering the main goal of any business is to make money, your ability to process debit and credit card payments quickly, efficiently, and as lawfully as possible makes a card reader one of the cornerstones of your business.
Don’t make a final decision until you’ve weighed the pros and cons of each type of reader carefully, while also taking into consideration how the majority of your target consumers will want to pay for their purchases.