How to Take Card Payments Via Your Mobile Phone: A Step-by-Step Guide

To all business owners looking for a quick, easy and cheap way to take payments: you can find one in your pocket. A mobile point of sale (mPOS) system transforms your smartphone into a payment taking device, which is an excellent way for your business to start charging without shelling out big figures for hardware.

If this sounds appealing, give our free quote comparison tool a try. It allows you to get bespoke quotes from our trusted providers for you to compare.

If you’d like to know more about mPOS systems, stick with us. In this article, we’ll cover their features, benefits and drawbacks.

You’ll also find a step-by-step guide on how to take payments via your phone – but if you’re part of the TL;DR crowd, the steps are:

What is a mPOS?

Simply put, mPOS is a system that makes your smartphone and tablet act as a payment register. This allows you to take payments virtually anywhere. All you need is: a smartphone or tablet, an internet connection, and a card reader.

By running on your smartphone via an app, mPOS systems don’t require you to buy or lease pricey hardware, such as countertop displays or portable terminals.

Unlike traditional POS systems, you’re not bound to fixed-term contracts or account fees with a mPOS. Instead, you’re only charged transaction fees according to your usage.

Because of all that, mPOS systems require a low initial investment, which made them grow in popularity in recent years.

Why accept card payments via your mobile phone?

mPOS systems are widely used due to their low cost and ease of use. However, they’re not a one-size-fits-all solution and come with their set of limitations.

✔️ Pro: Low cost

By foregoing account fees, mPOS systems ditch the bulk of the fixed costs you’d pay with traditional POS systems. Conveniently, you can also buy their readers outright, whereas traditional systems only lease them on a monthly subscription.

✔️ Pro: Ease of use

Befitting a solution fitted into a device you already use heavily (and one that you may be reading this on), mPOS systems are very easy to grasp. Also, since they don’t require new hardware (apart from a card reader), its installation is quick, painless and free of charge.

✔️ Pro: Extra portability

Free from the constraints of countertop devices or corded card readers, mPOS systems allow you to go about your business day and charge your customers by quickly pulling out your reader and phone. This makes mPOS a great tool for mobile businesses.

❌ Con: Less comprehensive than fuller systems

mPOS systems tend to support less currencies and offer less reporting tools than traditional POS ones. While these shortcomings don’t affect all ventures, mPOS systems with few reporting tools are ill fits for small businesses that need data insights to plan their growth.

❌ Con: Battery drainage

Anything you use too much is more likely to wear out and the same goes for your phone’s battery. Running your mPOS will require a constant internet connection, plus a Bluetooth connection to sync with the reader. These, combined with the power required for the app itself to function, can quickly reduce your battery life over time.

❌ Con: Phone is more prone to damage

The moment you decide to make your phone a work tool, it becomes more prone to damage than it would be if you only used it for leisure. Plus, considering that any accident could financially impact your business, you may need to insure your phone in case you don’t already, which would mean an extra fixed cost.

What are the different types of mPOS systems?

The mPOS market is fast-paced, with new variations launching regularly. Below you have three of the most popular mPOS systems.

• Phone-based

A phone-based mPOS system transforms your phone into a payment register with the aid of an app, a card reader (paired via Bluetooth), and an internet connection.

• Tablet-based

This mPOS system works in a similar way to the phone-based mPOS one, but replaces the phone with a tablet. The rest of the setup remains the same: your mPOS app must be installed, you must use a card reader and you must have an internet connection.

• Tap on phone

An evolution of the phone-based mPOS, tap on phone transforms your own phone into a card reader, so you don’t need to buy a separate piece of hardware just to do that. You still need to have the app of your mPOS installed and to be connected to the internet.

How to take card payments via your phone

1. Explore your options

Start venturing into the brave new mPOS world and checking providers, looking for the one that best suits your business. A surefire way to do that is by comparing quotes, which we can help you with once you fill in our free comparison tool.

You should look for transaction fees and hardware costs that fit into your budget, as well as features that are useful to you. For instance, an invoicing platform is a tool consistently mentioned as important in our audience research, so it’s worth choosing a provider that offers one.

2. Open an account with a payment processor

In case you don’t already have an account with a payment platform, you’ll need to sign up with one in order to use its service. If you’ve already made your choice of payment processor, you can skip to Step 4.

3. Get a mobile card reader

Next up is buying a card reader. Most mPOS systems offer more than one, so you’d have to choose which fits your business best and then get it. It’s worth checking beforehand if the reader you’re planning to buy is compatible with your phone, as they’ll need to be paired up to work. If you’re part of a small team do check out our ranking of the best card machines for small businesses.

4. Open the POS app

With the hardware sorted, now comes the software bit: download your provider’s app and log in. It’s through the app that your mPOS system will process the payment and issue the payout request so the amount reaches your account. It’s also there that your transaction data will be stored.

5. Connect your device to the card reader

Pair your reader to your phone. While some providers offer offline mode, internet connection is usually required for the mPOS system to run smoothly. You can avoid buying a reader if you choose to get paid via QR codes and payment links, but these usually have higher transaction fees.

6. Start accepting payments!

That’s it, you’re set! After these steps, your customers will be able to tap onto your reader and you’ll be able to take their payments via your phone.

You may have noticed some customers also paying with their phones. If you’re curious about this trend, read up on the latest mobile commerce statistics.

What businesses are mPOS systems best suited to?

Due to its outstanding portability, mPOS systems are best suited to mobile businesses. It allows for more flexibility and frees business owners from having to operate from a desk or counter.

Food trucks, farmers markets and arts & crafts businesses are particularly poised to benefit from these systems. To these entrepreneurs, using a mPOS will mean selling their products on the go in a very hassle-free way. If you’re one of them, your only concerns will be being online and making sure your hardware is charged.

Restaurateurs can also benefit from a mPOS system and level up the dining experience they offer by having orders automatically taken at the table, rather than having waiters queuing to use a single countertop machine.

Alternative ways to take payments

Versatile and practical as they are, mPOS are far from being the only way to take payments. Some of the alternatives out there are:

• Traditional POS systems

These fuller POS systems may come with more hardware costs, but they come with more features. These work better for medium to large businesses.

• Over the phone

In this system, with the help of a virtual terminal, you’re able to input your customers’ card data you get through the phone into a safe online processing platform and take payments. This alternative works well if your business deals with a lot of card-not-present transactions.

• Online

This alternative is based on a payment gateway, which is a solution that allows you to take payments through the internet, without a reader. As the name implies, it’s a great choice for online businesses.

Our methodology

To provide you with this guide, our independent researchers conducted a deep dive analysis on two market fields directly related to payment taking.

The first is merchant account providers, which are companies that provide card machines and other types of payment solutions. The second is EPOS systems, which go beyond that and offer features, such as data reports and stock management, that allow you to run your businesses.

Our knowledge in these fields give us a solid insight into payment processing and the best current methods to do it. We’re also able to confidently explain how the different methods – such as the one discussed in this article – can affect your business, with clear benefits and drawbacks.

Next steps

If you’re a small business owner keen on taking payments without spending a lot, taking payments via your phone is a quick and easy way out. All you need to do is buy a card reader, download a mPOS app to your phone, connect it to the reader, and you’re set. For mobile businesses in particular, the extra portability makes this a very efficient solution.

If you’re ready to get some signal to your business, use our quick and free comparison tool. We’ll match you with the providers most suited to your needs, and they’ll be in touch with tailored, obligation-free quotes!