Secure Mobile Payments With Portable Credit Card Readers
Taking credit card payments once was limited to businesses with large sales volume and magnetic stripe readers attached permanently to point-of-sale systems. These readers could only be found at the check-out counter next to the cash register, never traveling outside the friendly confines of a brick and mortar retailer. But as more and more entrepreneurs and businesses (large and small) moved their operations away from the traditional storefront, they sought mobile solutions with more flexibility. That’s where mobile credit card readers came in.
Early adopters of mobile readers ran the gamut from vendors selling products at open air markets to companies who wanted more control over how and where they served their customers.
As mobile credit card readers go, retailers large and small will find many different options in the marketplace today. Devices called sleds are commonly used to fit on a smart phone or tablet and provide the magnetic stripe reader needed to process a credit card. The reader transmits the encrypted credit card data to software applications on the phone such as point-of-sale programs, which process the payment.
And recently, companies like Square (pictured at right), Verifone, and Intuit have been battling it out, offering ultra-mobile encrypted credit card readers that are smaller and less complicated than the sleds, and correspondingly less expensive.
A step up from mobile readers is the long awaited near field communication (NFC) technology which allows data exchange, wireless connection, and simplified transactions between two devices that are held or tapped together. Already in use in European countries, NFC has been in the news in the United States for quite some time, but hasn’t made it past demonstration status.
Somewhat similar to radio frequency identification (RFID) technology, NFC works using a tag and a reader. The tag is located in the device – generally a mobile phone or tablet computer – which stores data and transmits it wirelessly, and the companion reader accesses the information stored on the tag. The tag and the reader must be in close proximity (within a few centimeters) of each other to communicate.
Advocates of NFC anticipate a variety of applications including mobile payments, ticketing and boarding passes for air and train travel, coupons and loyalty programs, peer-to-peer payments, file sharing and mobile gaming. NFC enabled devices can also serve as identification cards and keycards.
A few companies are pioneering readers enabled for traditional credit card processing as well as the new NFC payment options. One such provider is ERPLY, an enterprise software company based in Estonia, focusing on retail and point-of-sale technology, who recently launched a mobile reader designed to interface with both the iPad and the iPhone. Their goal is to give retailers plenty of options to serve the needs of customers coming from different places along the technology spectrum.
And the mobile payment network ISIS now has the support of Visa, MasterCard, Discover, and American Express along with three of the four major US wireless carriers (AT&T, T-Mobile, and Verizon). Most in the POS industry can’t wait to see how these developments combine to advance an already fast moving technology.
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