As an amateur artist kicking around the idea of selling my work, I’ve recently wanted to know about the best way to accept payments to a mobile phone. If you're in business and are looking for a mobile payment processing system, there are now countless options to choose from. Card readers - tiny dongles that usually plug into your mobile device’s stereo jack - allow you to accept all major credit cards on almost all new devices, from phones to tablets. (For background reading, check out Cache, Text or Direct Bill: The Truth About Mobile Payment Systems.)

That's a big improvement over only a few years ago, when if you wanted your business to be able to receive more than just cash, you needed expensive hardware and a costly card processing service. No more. Today, anyone with even a smartphone or a tablet can process almost any payment, anywhere.

Belinda Mays, a success strategist who uses Square mobile payments told me,

"I was conversing with someone about what I do and I mentioned my book and we discussed it briefly … They asked where they could get a copy and I said, 'right here'. They said, 'I don't have any cash on me.' 'Not to worry,' I told them, 'I can process your payment on my phone.' I popped open the trunk, swiped their card, gave them the book, the receipt was sent to their email, and voila, a sale."

Point of sale systems are convenient for both vendors and customers, and allow mobile transactions to be done in a whole new way.

"I love that I can walk my 'cash register' over to my customer, which I see as another way to provide service," said Jonathan Plotzker co-owner of a skincare company called Heliotrope San Francisco.

And of course, processing the payment on a phone - rather than reverting to old-school methods like manual carbon-copy devices - adds a level of security for the consumer, especially since those credit cards never have to leave their owners' site. So, although mobile payment systems are not used in overwhelming numbers yet, the number of businesses using these devices is growing.

Only a small number (10 percent) of businesses that responded to ControlScan’s 2012 Mobile Payment Acceptance Study said they were currently using a mobile device to process card-present (CP) payments; however, those who were using the technology indicated they were satisfied with current mobile hand-held technology and the mobile payment systems that support them. Personal services organizations had the highest adoption rate (17 percent), with 47 percent of these respondents replacing their traditional POS with one or more mobile devices.

Mobile Payment Systems: High Tech or Tech Wreck?

Recently, I tested eight devices and their respective mobile apps. The majority of the devices in this shootout are powered by the stereo jack, which typically requires that the volume be turned to the maximum. All the card readers tested work with most credit cards and on most devices, especially Apple iOS and Android. They all offer some kind of encryption, and none of them stores any credit card information on the either the phone or tablet. Scanning the cards can be fickle sometimes -these readers are in their infancy after all - but most of the readers will do it within three tries. In many cases, a beat-up magnetic credit card strip appears to be to blame, rather than the hardware or phone. Here’s our shoot out.

Square Intuit GoPayment Verifone Sail RevCoin PayPal Here SwipeNow Sage PayAnywhere
Devices Supported Apple iOS, Android Most Blackberry Apple, and Android Apple iOS, Android Apple iOS, many Android Apple iOS, Android Apple iOS, Android Apple iOS, Android, Blackberry Apple iOS, Android, Blackberry
Credit Cards Supported All Major All Major All Major All Major All Major All Major All Major All Major
Virtual Terminal Yes Yes Yes Yes Yes Yes Yes Yes
Supports Refunds Yes Yes Yes Yes Yes Yes Yes Yes
Processing Fee 2.75% 2.70% 2.70% 2.55% 2.70% 24.95 per month, +24 cents / trans, and 1.7% 2.7% +transaction fee 2.69%
Manual Transaction Costs 3.5% + $1.50 3.70% 3.70% 3.55% + $0.15 / trans 3.49% + $0.19 / trans 2.49% 3.7% +transaction fee 3.49 percent plus $0.19
Subscription Based Payment: $275 per month, 0% fee $12.95 monthly = 1.7% swipe $9.95 monthly = 1.95% swipe No Multiple available See normal processing fee N/A No
Debit Card Included for Quick Cash Access No Yes No Yes No No No No

Hardware

Jack & Plug Type 3.5mm Stereo Jack 3.5mm Stereo Jack 3.5mm Stereo Jack 3.5mm Stereo Jack 3.5mm Stereo Jack 30-pin dock connector 3.5mm Stereo Jack 3.5mm Stereo Jack
Provided free? Yes Yes Yes $9.99, refunded Yes Yes Yes Yes

The Pros and Cons

Square



Pros:
  • The application is very user-friendly
  • Best customer recognition in the lineup
Cons:
  • Sums of money over $999.99 are held up for several weeks, and the highest fee make this best suited to a small, part-time businesses.
  • Reader didn't work the first time and had to get a second one shipped. Easiest to lose.

Intuit GoPayment



Pros:
  • Test drive feature means new users don't have to commit to using the service to try scanning a card
  • Scanned very well
Cons:
  • Can't track cash payments
  • Slightly narrow stereo plug, which would cause it to spin around in the jack and even fall out

Verifone Sail



Pros:
  • The app also lets you scan UPC bar codes
  • Pretty design
Cons:
  • Another interface that needs to be more user friendly
  • The reader can block screen view depending on how it's inserted.

RevCoin



Pros:
  • Doesn't require a bank account.
  • Provides quickest way for users to access their money.
  • Unique, eye-catching design. A debit card is included along with an extra reader.
Cons:
  • Reader costs an upfront $9.99 that users don't get back until they have processed $400
  • The wire extending the device's reach is actually inconvenient as it requires two hands instead of one to hold the phone and reader, making swiping difficult.

PayPal Here



Pros:
  • Natural upgrade progression for the countless people who already have a PayPal account.
  • Second-sturdiest construction after PayAnywhere.
Cons:
  • Setting up the app and account was the most complicated and time consuming of all services tested.
  • The device can be finicky to use.

SwipeNow



Pros:
  • Great merchant account and virtual terminal
  • Reader is more powerful and provides more reliable swipes thanks to the dock connector jack
Cons:
  • Offers no free subscription plan
  • Current 30-pin dock connector jack has poor versatility across devices. Can't charge phone while using card scanner.

Sage



Pros:
  • Lets users record cash transactions.
  • End-to-end encryption type is the best in lineup I tested. Handy strap to help hang on to the device.
  • In-app invoice presentment and payment is available to registered users
  • Automated posting of transactions into major accounting systems
Cons:
  • UI is not as intuitive as it should be.
  • If not pre-attached, the strap is extremely difficult to thread.

PayAnywhere



Pros:
  • Excellent UI - very intuitive
  • Sturdiest of all tested, plus a nice rubberized coating comes with strap.
Cons:
  • Excessive steps in app
  • If the strap is not pre-attached, it is very difficult to attach.