iPhone credit card readers are far from mainstream, but as they increase in availability and use, questions about security arise. Accepting credit cards on your iPhone can be just as secure as a traditional terminal: which is to say that it s very safe, but never completely risk-free. But any reservations you might have about accepting credit cards on your iPhone (or handing your card to someone who does) can be set aside. With advanced security measures built in to the entire process, mobile credit card processing is streamlined, safe and secure for both the merchant and the customer.

Every iPhone credit card reader manufacturer touts the security of their credit card swiper, and to be fair, reasonably so. Most iPhone credit card readers ensure cardholder data protection by incorporating the following technologies and policies that let you streamline swipers without sacrificing security:

The Payment Card Industry Security Standards Council is composed of the major players (MasterCard, Visa, American Express, Discover and JCB) to manage and implement data security standards. Composed of 12 requirements (and 220+ sub-requirements), the PCI DSS compliance encompasses a robust set of precautions with the intent of protecting both consumers and businesses from credit card fraud. iPhone credit card readers contribute to the overall PCI compliance plan of a company by incorporating data encryption, secure network communication and cardholder data access restrictions. While a secure mobile credit card swiper can t ensure PCI compliance by itself, it is an essential part of the whole PCI security structure.

One of the simplest security measures of a mobile credit card processing solution is using a password-protected app. It s bad enough to lose your iPhone, but you don t want thieves (or your kids, coworkers or college roommates) messing around with your credit card processing merchant account. Most iPhone credit card apps require a password or PIN number to open the application. The best iPhone credit card readers also log out after a set time period of inactivity. Some even allow the merchant to remotely deactivate their account or lock down access if the device is stolen. Of course for extra caution you should utilize the built-in iPhone passcode as well.

iPhone card reader providers are sure to advertise that their card swipers use encryption and that sensitive cardholder info is never stored on the iPhone. What they don t always tell you is what type of encryption they use or how the cardholder data is transferred. Encryption is the process of translating cardholder information into unreadable data for more secure data transfer. But not all encryption is the same.

Most mobile credit card processing solutions utilize software-based encryption, which means the credit card information is encrypted by the credit card app on the iPhone. The coded information is then used in place of the raw data for a secure transfer to and from the payment gateway, merchant accounts and issuing bank.

Software-based encryption is good, but it s not necessarily the best. For true end-to-end encryption, the data must be encrypted as soon as possible, which means before it even reaches the iPhone. The best iPhone credit card readers will encrypt the data in the reader as soon as it is swiped. Vulnerable credit card information isn t transferred or stored on the actual iPhone because it never has access to that information.

Credit cards and payment processing will never be 100 percent fail-safe, but with so many security measures implemented in the entire processing, security isn t a risk merchants have to carry alone. We ve reviewed the best iPhone credit card readers and can recommend any of the swipers on our lineup for security. With rock-solid physical and network security, strong organizational policies, secure apps and third-party security certifications, mobile credit card readers can help you maintain security. For the iPhone card readers that really go the extra mile on hardware-based security, see our reviews of the VeriFone PAYware Mobile and MagTek iDynamo.

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