What's the difference between mobile card readers and mobile pos systems? - mobile car reader and cell phone on table

What's the difference between mobile card readers and mobile POS systems?

Monday, November 17, 2014
For small businesses on the go, there’s a lot to consider to keep your business moving. You not only have to keep track of where you’re setting up your shop, but you also have to figure out how to accept payments when you’re not tied to a brick and mortar location. Customers have come to expect that businesses accept a variety of payment options, including credit and debit cards.  If your business doesn't accept these payment options, it can lead to a bad customer experience. But when you’re just starting out, it can be tough to know the tools you need to start accepting payments. So in this article, we’ll take a look at a few of the most common tools you’ll encounter as a mobile business owner – mobile card readers and mobile point of sale (mPOS) systems. First, let’s take a look at mobile card readers.

What are mobile card readers?

If you’re a business on the go – like a food truck or a service provider who makes house calls – you’ll need to accept payments no matter where your business takes you. Mobile card readers help you do just that. A mobile card reader is a piece of hardware that allows you to take credit and debit card payments by swiping a magstripe card or using a chip-enabled reader to take EMV chip card payments. Some mobile card readers can also accept near-field communication (NFC) contactless payments like Apple Pay®, Samsung Pay™, or Google Pay™.

Mobile card readers often connect to mobile devices or tablets such as an Apple iPad or iPhone. Many card readers also have the capability to connect to Android devices. As you can see, mobile card readers are essential for taking card payments on the go. Now, let's take a look at mPOS systems.

What is a mobile point of sale system?

As a business owner, you know that a point of sale (POS) system is critical to retail store success. But, for businesses on the move, regular POS systems can be cumbersome. After all, who wants to lug a cash register around? So, you need a system that can help you streamline your business on the go. That’s where mPOS systems come in – making any location a potential POS.

Simply put, mPOS systems turn a smartphone (like an iPhone) or touch screen tablet (like an iPad) into a wireless POS terminal. One of the biggest benefits to mPOS systems is that they allow a business owner to take their business on the move. These all-in-one systems can provide a versatile payment processing method for accepting card payments no matter where your business takes you. Because many mPOS systems are cloud-based, you can even accept payments without access to wifi. 

For small businesses like yours, it’s also a great way to accept credit card payments without the costs of a full POS system. To utilize the mPOS system, you’ll need a card reader like we mentioned before. Usually, you’ll also need to download a POS app (for both iOS and Android) that allows you to control your mPOS and accept payments.

To summarize, mobile credit card readers are hardware that allow your business to accept credit cards or debit cards, while mPOS systems let you process those cards and receive the funds from those purchases. Some mPOS systems may even include the hardware you need like mobile card readers, barcode scanners, receipt printers, and cash drawers. Now that you know more about mobile card readers and mPOS systems, let’s take a look at what types of businesses can benefit from mPOS systems.

What businesses can benefit from mobile POS systems?

When it comes to who can benefit from mPOS systems, the answer is simple: all businesses. Now, when you think of mobile businesses, you probably think of a food truck owner who needs to be able to accept mobile payments on the go. They’re a great example of someone who can benefit, but there are plenty of other businesses that can benefit too: service industry businesses like plumbers or electricians who make house calls to their customers and want to get paid on the spot; a brick and mortar store that holds sidewalk sales or attends craft fairs or trade shows; and busy storefronts that hire extra help during peak busy times and need help checking out customers. 

Essentially, mPOS systems are the perfect solution for any business that needs to accept payments on the go. That includes the full spectrum of businesses – from an entire fleet of food trucks to sole proprietors who only attend a few craft fairs a year.

Why is a mobile POS system important for businesses?

For any business that is looking to accept payments on the go, an mPOS system is essential, because without it, your business won’t be able to process payments, thereby limiting your potential sales. But mPOS systems don’t just let your business accept payments; they have a few other key benefits:

  • Easy to use – mPOS systems are typically easy to set up with many companies offering low or no monthly fees. That makes it easy for your business to start accepting payments on the go. Because many mPOS systems rely on smartphones, if you know how to operate a smartphone, you’ll most likely be able to get an mPOS system up and running quickly. In fact, with less POS hardware than traditional POS systems, some mPOS systems can be set up in a matter of minutes. Some systems are plug and play, simply utilizing a smartphone or tablet and then plugging in a mobile credit card reader to get started. That means you’ll be able to accept payments quickly from wherever you are.
  • Provide business insights – mPOS systems can collect a lot of customer data for your business. This real-time data can be very valuable, helping to improve your business’s operations and efficiency. By evaluating this sales data, businesses like yours can increase their performance and create more targeted strategies for future customers. That could mean offering more targeted items in certain locations or developing a loyalty program for customers. These management tools can also help you keep an eye on and analyze your current inventory, therefore giving you more insight into your product mix.
  • Integrates with current software – The third benefit is that mPOS systems can integrate with other software your business already uses. This gives you even more valuable functionality when you sync up your inventory management software with your mPOS system. You can also sync mPOS software with payroll, employee management, and accounting software, helping you to streamline your business even more and providing you business management tools all at your fingertips.

After reading over the benefits for your business, you’re ready to put an mPOS system to work. But you might be wondering how safe they are. In this next section, we’ll talk about mPOS security.

Are mobile POS systems secure?

Data security is one of the biggest and most important concerns when it comes to accepting payments at your business. And it’s a responsibility that shouldn’t be taken lightly. Luckily, mPOS systems have safeguards to protect your business and your customers. When looking into mPOS providers, you’ll want to make sure they’re payment card industry (PCI) compliant. Here are a few ways PCI-compliant mPOS systems can help protect data:

  • Encryption: When you take a payment using an mPOS system, this process encodes data with a specific “key” that unlocks the data. The only parties that have access to this encryption key are the sender and the bank processing the transaction.
  • Tokenization: In payment processing, this process substitutes the customer’s card number with a random string of numbers. This random string of numbers is used in the transaction in place of the actual card number. That way, even if the token gets intercepted by bad actors, it can’t be used for any other transaction.
  • Dynamic authentication: This process uses customer information to confirm transactions. Credit cards and debit cards with EMV chip technology are an example of dynamic authentication as they’re more secure than magstripe cards.

All of these security features add up to make mPOS systems a secure way to take payments on the go. If you need a mobile card reader or an mPOS system, you should talk to your current payment processing partner or merchant services provider for advice. 

Finally, it’s important to be aware of the fees for mPOS transactions. Depending on your payment processor, these fees could be separate and vary from your normal POS system. The right system for your business could come with monthly fees, fees for add-on services, expanded functionality, or even integrations with other software and tools. That's why it's best to talk specifically to an mPOS service provider to get an estimate of the charges and fees. Researching these costs can help prevent sticker shock once you decide to implement an mPOS system at your business.

In conclusion, you've seen the ways a mobile card reader and an mPOS system can help you deliver a great customer experience, even on the go. In turn, accepting payments with an mPOS system can help you grow and expand the reach of your business outside of the typical brick and mortar footprint. So no matter your business – from food trucks to artists and service workers – an mPOS system and mobile card reader can help you thrive.

Ready to find the right mPOS system for your business?

Heartland is the point of sale, payments and payroll solution of choice for entrepreneurs that need human-centered technology to sell more, keep customers coming back and spend less time in the back office. Nearly 1,000,000 businesses trust us to guide them through market changes and technology challenges, so they can stay competitive and focus on building remarkable businesses instead of managing the daily grind. Learn more at heartland.us