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To survive in today's competitive marketplace, every modern business needs to accept credit cards. And the most common way to process credit card transactions is through a credit card reader in conjunction with a credit card processor.

Credit card readers can be larger stand-alone units or mobile ones. While there are different kind of card readers and point-of-sale (POS) units, there is a lot to consider when it comes to choosing credit card processing hardware and providers.

Stand-Alone vs. Mobile Card Readers

Small businesses may not need the larger card readers found in stores. There are smaller, more convenient options. The easiest credit card readers for small businesses are those that connect to a mobile phone or tablet. They simply plug into the device's headphone jack and run using an app you install on the phone or tablet.

Mobile devices are good for people with home or mobile businesses or who travel a lot. Those with a brick-and-mortar business, however, usually find that a dedicated, stand-alone POS terminal and credit card reader is better. They are typically faster because they use an Ethernet connection rather than Wi-Fi, which means the sales transaction is processed faster.

Regardless of the type of card reader you choose, research POS and card readers extensively to learn about features that may benefit your business. Also be sure to check out these credit card processing services as well as mobile credit card processing providers.

Check Your Contract

Before going with any credit card machine provider, read the contract thoroughly. Many providers have variations in contract lengths, and then there are the fees you should familiarize yourself with.

Most credit card processors require a long-term contract. Some let you carry a contract month to month. The month-to-month option offers more flexibility, which is especially important for new businesses. If you're forced to close your business for a period of time, you won't be stuck with a contract and a device you can't use. Plus, early termination fees can range from $50 to $500 and include a closure fee, which can add up to several hundred dollars.

Besides an early-termination fee, credit card processors charge other fees. Read the terms and conditions of your merchant agreement carefully to find out what fees your processor charges and how much they cost.

Some companies charge a fee if you don't meet certain transaction requirements. Another fee is an address verification fee. Companies charge this fee when checking whether the credit card holder's address is the same as the one the customer entered when making his or her online purchase. This fee can cost 10 cents per transaction, which can add up. Some companies don't charge these fees, so it literally pays to check your merchant agreement closely.

When choosing a credit card reader for your business, be sure to consider the two main types of machines, stand-alone and mobile card readers, as well as their features and benefits. In addition, take the time to thoroughly review the card processor, including the merchant agreement. Read through the contract, including the terms and conditions, before you sign. Contract length, terms and fees can mean the difference between a payment system that works well for your business and one that gives you headaches.

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