How Mobile Credit Processing Works

mobile-credit-card-paymentsWith a small device attached to your cell phone, you can turn your device into a credit card swipe machine and use it to service customers in a retail environment. All you’ll need is a merchant account and an internet connection to make it happen. Here is a quick rundown of how it all works, and why some businesses are seeing mobile processing as the wave of the future.

Basic Technology

The basic technology behind mobile credit card processing is simple: there is an attachment that typically uses a device’s headphone jack in order to collect credit card information. There are also devices that work with your phone’s internal Bluetooth, but they are a bit more expensive than the basic headphone jack models.

Using these devices, and your phone, the only missing link is an internet connection. You can process transactions anywhere in your store so long as the servers can be reached.

Your phone becomes a payment gateway, but you typically need some kind of application to help process the transaction. Usually, when you get your merchant account set up, your payment processor will direct you to your app store to download such an application.

Aside from the credit card swipe, there is also Near Field Communication, or NFC, which functions a lot like a Star Trek device.  These devices allow the user to simply wave his phone and pass payment information directly to you, the merchant. While NFC is slightly less prominent, it does still exist.

Recent changes to both apple and Samsung devices have removed the headphone jack, so it’s important to make sure your device is compatible with the card reader you want to work with. You might also consider having a register system as backup in case your mobile system goes down for any reason. Otherwise, you’ll be stuck processing cash-only transactions and that may limit your business’ revenue for the day.


The big advantage to mobile payments is security, especially with NFC where the transaction occurs in a physical space over the Web. Securing payments from a breach protects your customers, and shield’s your business from liability. Some customers enjoy that their card never has to leave their sight, especially at restaurants. This data is also encrypted when the card is first scanned, which helps protect the customer’s data throughout the transaction. Payment Solutions, Inc. offers a low cost guarantee, and has been rated the #1 merchant account provider for six years in a row.