C-Suite Advisory

What Business Owners Need to Know About Card Readers

Card readers allow businesses to process credit and debit card transactions. As business owners, if you’re looking to open a physical store or accept transaction over the phone, it’s important that you choose a card reader that works for your business needs. Many carder solutions, like Vantiv, offer different benefits to business owners that want to make the most out of their point-of-sale terminal. In order to make an informed decision–and to keep your card reader safe from hackers–here’s what you need to know about card readers:

Not All Readers Help Scale Businesses

When you’re running a business, you always forced to think about the future. For example, if you notice that more people purchase your grill supplies the weekend before Memorial Day, you’d want to order more of those supplies way in advance to accommodate that trend. As your business grows, you adjust.

Having technology that allows you business to scale as needed is critical. As brand awareness increases, so too will your payment requirements and necessary hardware. This means that the hardware and software you choose needs to be scalable, too. Just because you don’t need one feature today, doesn’t mean you won’t need it in the future. After all, switching systems and learning new platforms can be complicated. And because not all readers allow a business to scale effectively, you’ll need to think ahead and take a look at the features your business might need as you explore new growth opportunities

There’s Many Types of Terminals

If this is your first time operating a physical card terminal, than you should know that there’s more than one to choose from, and each comes with its own pros and cons. The four most common are swipe machines, smart terminals, virtual terminals, and mobile terminals.

The standalone standard swipe machine is a basic piece of equipment that people have been using for decades. This reader is more prevalent in small family-owned shops, and don’t come equipped with a chip reader. Because they are more susceptible to fraud, most retail businesses stay away from this type of model, though it’s still common among local businesses that have been around for a while.

Smart card terminals process the EMV chip, and are safe for consumers and business owners. They also support near field communications for mobile wallet options like Apple Pay and Google Pay (which allows shoppers to pay for purchases by tapping their mobile devices near the terminal). Most importantly, smart terminals come equipped with a variety of features, like loyalty reward capabilities. And as many business owners know, loyalty programs are more important in the business world than ever. A study from Colloquy found that 53% of Americans participate in a loyalty program, and U.S. consumers hold 3.8 billion memberships in customer loyalty programs. Furthermore, at least a quarter of Americans actively seek customer loyalty programs while shopping. With so much emphasis on loyalty, it’s imperative that business owners implement a program into their strategies and have a terminal that can support it.

Virtual terminals turn Internet devices into POS systems, on the go. This is a popular option for mail order systems, or those who pack and ship during after-work hours. Generally, they are an ideal solution for business owners who make transactions where the card is not present, like a home-based business, hospitality companies, or merchants that are often on the road.

Lastly, mobile terminals allow you to free your business from the constraints of your POS systems. Here, the mobile terminal is connected to the POS via Bluetooth, which allows shoppers to swipe a transaction within range of the store. You might notice businesses doing this to cut long lines and increase customer satisfaction. If you can cut down a customer’s wait time, chances are higher that they’ll make a purchase. They also process smart payments using NFC, similar to smart terminals. Mobile terminals are becoming more popular in restaurants.

Credit Card Skimmers Steal Information

Credit card hacking is at an all-time high. Analysts predict that by 2020, cybercrime damage will reach upwards of $6 trillion. Today’s consumers need to protect themselves for credit card fraud and identity theft, and that begins with business owners. As the business owner, it’s your job to ensure that every person that makes a purchase is safe, and feels confident with their purchasing decisions.

Unfortunately, credit card readers are at risk, thanks to a theft device called a credit card skimmer. Card skimming costs businesses more than $2 billion in fraudulent charges every single year. These skimmers are placed directly over card readers, tricking the consumer to swipe a fraudulent reader that captures all the credit card information, and still allows that person to make the transaction. They blend in so well, that most people can’t see them.

Businesses that use secure chip cards, as opposed to magnetic strips, are able to keep there consumers much safer. Although credit card skimmers are becoming increasingly advanced, they still haven’t progressed enough to be able to work on chip readers. And surprisingly half of all businesses are still using magnetic strips.

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Jessica Todd Swift
Jessica Todd Swift is the deputy managing editor of the CEOWORLD magazine. She is a veteran business and tech blogger, journalist, and analyst. Jessica is responsible for overseeing newsroom assignments and publishing and providing support to the editor in chief.