How to accept credit cards on Android

The cost of a credit card machine or POS (point of sale) system can be a huge expense for a small business – sometimes up to $1,300. That’s why having the ability to accept credit cards on Android or iOS has become the preferred way for small businesses to accept credit card payments.

This article will give you an overview of ways to accept credit card payments on Android devices. It will also discuss mobile credit card processing, review mobile credit card readers, and provide information about credit card processing fees.

What is mobile credit card processing?

With the recent technological boom and desire for contactless payments, check and cash payments have become less desirable. More customers now prefer to pay using debit or credit card terminals or POS systems.

Just as it sounds, mobile credit card processing is a way to accept credit card payments through a mobile credit card reader on a device like your Android phone. This method requires a small business to open an account with a payment processor like Paypal or Stripe and download their app. 

Depending on the payment processor you choose, you will have to purchase a mobile credit card reader. Some payment processing companies send the first credit card terminal for free, and some require you to purchase them.

How do I accept credit card payments on my Android phone?

Research a payment processing system that best suits your needs to get started. You will then open an account with the payment processor and download their app directly onto your Android device to accept payments. 

While some payment processing companies include a free chip and swipe reader, others require purchasing. After setting this up, you can sit back and watch your bank account grow. 

What type of credit card reader should I use to accept payments?

Payment processors use mobile card readers, including magstripe, EMV, and NFC payments.

Magstripe

While magstripe, a credit card swiper method to accept a magnetic stripe of a credit card payment, is one of the most common payment processing systems, it is also the least secure and easiest way to encounter credit card fraud. 

Most credit card systems are moving away from magstripe cards for this reason. It is probably best to avoid magstripe systems altogether to protect your small business and customers.

EMV

An EMV chip reader collects customers’ payment information digitally embedded on a square chip in credit and debit cards. Although EMV stands for Europay, MasterCard, and Visa, EMV chip cards are issued on every credit card in the U.S. regardless of the credit card company. 

This means that any card that contains an EMV chip will work with any EMV chip reader.  Additionally, EMV readers use chip and PIN or chip and signature technology to verify customers’ information, making it challenging to commit credit card fraud. For this reason, chip readers have become the most recommended system for credit card transactions.

NFC

In today’s Covid-19 pandemic, contactless payments have become a preferred choice for many. NFC (Near Field Communication) is a small device that uses wireless payment technology to complete credit card transactions. Customers use a credit card containing NFC technology or download a mobile wallet app like Apple and Google Pay. 

NFC allows two devices to be close to each other to exchange data securely. Although there has been an increased demand for contactless payment options, NFC contactless payments are not as standard as magstripe and EMV systems. If you prefer this payment method, you may want to consider accepting other forms of payment as well.

Manual entry

While payment processors require a mobile card reader, it is possible to enter cards manually. Apps such as Stripe allow the business to manually enter the customer’s credit card information directly into the app to process the payment. 

Most companies charge a slightly higher rate for manual processing. While this can be time-consuming and a little more expensive, it can be a lifesaver when a credit card reader is broken or inaccessible. Of course, this process has many downsides, but it will allow you to keep your business open in a pinch.

EMV with NFC

The best payment processing system option is a chip card reader with contactless payment technology. This type of credit card reader is secure in protecting both your small business and customer from fraud, and it allows for multiple payment options.

Which mobile credit card processing is cheapest for small businesses?

For a small business, budget is everything. The smallest fees can add up and end up hurting your bank account.  All fees need to be considered when considering a system to process transactions.

While it may seem easiest to go with well-known companies like PayPal or Zettle, it’s not always the best deal. Often these companies lure consumers with their brand recognition and too-good-to-be-true deals, such as receiving a discount credit card reader upon signing up with the company. However, these companies can sometimes have hidden fees, making a deal like a discount credit card reader less valuable.

Lesser-known companies such as Stripe may require you to purchase one-time basic equipment at full price, but they often have lower processing fees, making the one-time fee worth the expense.

For the rest of this section, we’ll compare Zettle to Stripe. 

Monthly fees

Many companies charge a monthly fee to process payments, but luckily both Zettle and Stripe do not. This is one less thing for your bank account to stress over.

Card readers

Zettle charges $29 for the first credit card reader. Additional credit card readers are $79. Stripe has a flat fee of $59 for each credit card reader. If you only need one or two, Zettle is cheaper. 

However, if you need more than two card readers, Stripe is the more economical choice, not to mention their card readers accept chip payment and contactless payments such as Apple Pay and Google Pay.

Transaction fees

Whenever you make a successful card transaction, the processing company charges you a small percentage for that transaction. This fee usually includes a small percentage of the sale and a flat fee. Zettle charges 2.9% and a flat fee of .09 cents per transaction, whereas Stripe charges 2.7% and .05 cents per transaction entry.

While the percentage for both Zettle and Stripe are nearly the same, Stripe’s flat transaction rate is significantly lower. If you’re a small business that makes many daily transactions, this is important to consider. 

After processing just 100 transactions, Zettle’s flat transaction fee adds up to $9. That doesn’t seem so high, but compare it to Stripe: After 100 transactions, you’ll only be charged $5. Let’s say you process 1,000 transactions in a typical week. That small Zettle .09 cent flat fee turns into $90 while Stripe’s .05 cent flat fee turns into $50. That’s a big difference over time.

Chargeback fees

A chargeback, also known as a dispute, is when the customer’s payment is returned to their card. There are many reasons for a chargeback, such as making a return or disputing a fraudulent bank account payment. 

Unfortunately, your small business will be hit with a chargeback fee for reversing the transaction when this happens. Zettle’s chargeback penalty fee is $20, while Stripe’s chargeback fee is $15. Though a $5 difference may seem small, that adds up over time.

Hopefully, chargeback fees are rare for your business, but if they do happen, it’s nice to know you’re paying the lowest fee.