4 Reasons Your Business Needs a Credit Card ReaderLower costs and improved flexibility are making credit card readers easier than ever.
The days of being gouged by high fees associated with processing credit card payments are over, and that means the last small business holdouts foregoing a credit card reader might want to reevaluate.
Robert Siciliano is an IT security expert for bestcompany.com, a website dedicated to rating U.S. companies for consumers. He’s also an Amazon best-selling author, a former merchant, and has been a staple of cable news networks as an expert in the field of information technology and security.
Siciliano outlined why now is the time for every small business owner to invest in a credit card reader.
Attaining merchant status has never been easier
Merchant status is necessary for any small business that wants to accept credit cards as payment. In the past, obtaining merchant status was cumbersome and many small business owners didn’t want to go through the hassle and cost to accept credit cards. But now, it’s much easier to obtain merchant status, eliminating a major hurdle to accepting cards.
“To get merchant status, you used to have to provide bank statements, business certificates, articles of incorporation, social security numbers and more; it went on and on and on and it turned a lot of businesses off,” Siciliano said. “Over the past four to five years, you’ve had a number of companies popping up that have made it really easy for anybody to achieve merchant status without a monthly fee and without even having to sign a contract of any kind. There’s really no obligation, no money up front and there are competitive rates. With that being said, why wouldn’t a small business accept credit cards?”
Credit card readers are more affordable than ever
The latest versions of credit card readers have become more affordable. The cost is more than worth it for the convenience it provides customers, and the readers themselves can be bought online for very little money. If your company wants to attract millennial customers, who make up the first generation to prefer debit/credit transactions for any purchase, you need a credit card reader.
“The ease with which you can set up the ability to swipe cards makes it a no-brainer in today’s market,” Siciliano said.
“Transaction fees used to be upwards of 9 percent and you had to factor in what it was costing you to buy the equipment on top of the merchant status fees. With today’s cheap readers and the ease with which you can get merchant status, it makes little sense to not have the ability to swipe cards.”
New technology helps limit your liability
The classic credit card reader inspects the magnetic strip on the back of each card. Swiping the card and punching in the total cost is easy, but it’s less secure than the new EMV cards. These have an embedded chip in the card, which allows new EMV card readers to process payment without a swipe while time-coding each transaction. The new chip technology allows for more security against counterfeit transactions, which are a real threat to both consumers and business owners. More important for small business owners, however, is that investing in these readers enables the business to shift liability to the credit card company in certain cases of fraudulent card activity.
“The shift of liability occurred on October 1, 2015 and it means that if all you have on-site is a magnetic strip reader versus EMV or chip signature, then you would be responsible for that breach if one were to occur,” Siciliano said. “If you had the EMV or chip signature terminal, you would not be responsible for that breach but rather the credit card company would be. It’s a pretty big deal when a small business owner can shift that kind of liability.”
An important note: Liability for fuel pumps and ATM transactions shifts in 2017.
The new point-of-sale (POS) technology is more flexible
The days of bulky and expensive cash registers are over. Companies, such as NCR, have expedited the transaction process and made it easier for business owners and consumers with the use of tablets and more compact registers. These POS systems also have options that include credit card readers (both traditional magnetic and EMV).
Utilizing a tablet system with mobile credit card readers allows for more hands-on customer service.
“Having the flexibility to move your transaction location around the store or even around your city is something many small business owners like,” Siciliano said. “The new POS systems are good for both sides of the transaction process, and due to their cost being manageable I think it would be foolish not to look into them.”