If there’s one thing to take away from this post, it’s that all credit card reader are not made equally. Despite looking similar, they vary greatly in features, business benefits and cost.
Before investing in credit card readers, you should have a thorough understanding of them. Most importantly, you should be aware of the red flags to look for when shopping to ensure you’re purchasing readers that will be a long-term investment for your business.
Below, we discuss six things to absolutely avoid when shopping for credit card readers.
Credit Card Readers: Red Flags to Look For
- No EMV certification: With the majority of cardholders now having EMV-chip cards in their wallets, you’d imagine that non-EMV certified credit card readers would be a rarity, right? Wrong. Non-EMV certified readers is still a reality for many providers in the payments space. EMV certification is a must, as it enables your business to properly process chip cards and protects your business from bank-initiated chargebacks.
- Middleware and native software: If the credit card reader you’re eyeing communicates with a point-of-sale (POS) system, ensure the POS doesn’t run on native software nor requires middleware to communicate with it. These types of softwares put your business within PCI scope, subjecting your business to annual PCI audits and quarterly software scans, which can cost your business a pretty penny.
- Slow EMV processing: Proper EMV acceptance eliminates the issues mentioned above, but if it’s a slow system, it creates another problem: bottleneck. The type of software used can contribute to slow EMV processing speeds, but the quality of engineering behind the credit card readers can also contribute to the lag time. Compare processing speeds when vetting credit card reader options for your business.
- Cashier facing: There are five good reasons to avoid a cashier-facing credit card reader, and they mostly tie into the future of payments. With chip and PIN on the rise, it’ll only be a matter of time until you are forced to upgrade your equipment or required to add a PIN pad to your payment system. Invest in a customer-facing terminal today so you’re prepared for the future and can save money in the process.
- Strict signature options: Historically, signatures have been critical to processing credit cards. Now, with the introduction of EMV and advanced technologies, a hard requirement for a signature doesn’t always apply. But eliminating the option to get a signature isn’t quite the way to go, either. Avoid credit card readers with limited signature options, as a signature will still be needed in certain payment scenarios.
- Limited acceptance: Not only is EMV acceptance a must with credit card readers, but so is the ability to process NFC mobile payments with devices like iPhones, Apple Watches and even Fitbits. Projections show NFC mobile payments only increasing, and by 2020, it’s anticipated that in-store mobile payments in the U.S. will surpass $314 billion. Failing to allow customers to pay with NFC devices can limit business and success with modern customers and in the coming years.
Shopping for credit card readers shouldn’t be a single-day task. Make use of buyer guides and demonstrations to determine the best reader for your business. Consult professionals for second opinions and verification of payment-industry related information you may not understand. Making a choice on credit card readers shouldn’t be taken lightly as it can have serious implications for your business’s success and security if done quickly without thorough scrutiny.
Do your credit card readers have any of the red flags we’ve listed above? Tell us how these issues have impacted your business in the comments section below.
Editor's Note: This post was originally published in June 2018 and has been updated for comprehensiveness and accuracy.