Updated March 11, 2021

Best Credit Card Reader for Small Business

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Looking for the best credit card reader? It'll depend on your needs. Find the top readers for small businesses here.

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It's easy to confuse a credit card reader and credit card machine. But they are not the same.

  • Credit card readers attach to your mobile device (phone or tablet) via a headphone jack or a Bluetooth connection. You accept the payment using a mobile POS app.

  • A credit card machine connects via a phone line or internet connection. They read and accept credit cards without connection to a POS app. Credit card machines also typically cost more than credit card readers.

Before finding the best credit card reader for your business, you need to know how the pricing works. Read on for our breakdown.

Understanding Pricing

When you choose a credit card reader, you're paying for the credit card processing too. Different readers have different fee structures. Be sure to watch for:

  • Monthly Subscription or Membership Fees
    This is a fee simply to use the software. You pay each month, even if you don't process any payments.

  • Percentage of the Transaction Costs
    This processing fee is a flat percentage of each transaction. For example, you may pay 2.75% of the transaction in credit card processing fees.

  • Interchange-Plus Pricing
    Some companies charge the Visa, Mastercard, Discover, or American Express interchange fee plus a wholesale markup. You'll see it as 1.7% + $0.15, for example. The processing company makes the markup while the card network keeps the interchange fee.

  • Mixed Flat-Rate Costs
    Some companies charge a flat rate plus a markup. For example, they may charge 2.4% plus $0.10 per transaction. You can't tell how much the interchange fee is in this model — it's combined with the flat rate.

  • Equipment Costs
    You may also pay for the credit card reader itself. The cost will vary. But you're more likely to be charged if you need more than one or you need multiple login IDs.

Can you use a credit card reader on a laptop?
Most mobile credit card readers don't work on computers or laptops. However, each of the readers on our list includes a free virtual terminal. You can key in the card information instead of swiping, tapping, or dipping the card. Just watch out for the fees, as keyed-in transactions usually cost more.

Best Overall: Square

Square has a free credit card reader and a pay-as-you-go pricing structure. It includes a free mobile POS app. Plus, it offers the same pricing for all credit cards (Mastercard, Visa, AMEX, and Discover).

Retail operations, restaurants, and appointment-based businesses can opt for an industry-specific POS for an extra cost of $50 - $60/month.

Every Square plan includes:

  • Free magstripe reader
  • Free mobile POS app
  • Fraud prevention
  • Accept offline payments
  • Free ecommerce store


  • Transaction fees: 2.6% plus $0.10
  • Magstripe card reader: first one free, $10 for each additional
  • Chip/EMV reader: $49/each


  • Instant approval without underwriting delays
  • Month-to-month-contract with no early termination fees
  • Robust back-office management and reporting
  • Receive funds within one to two business days or pay extra for Instant Deposit


  • Newer iPhones need a lightening adaptor for the headphone jack
  • Account cancelation risk is high
  • The POS is basic and not suitable for complex or long established businesses

Cheapest Credit Card Reader: Payanywhere

Payanywhere has a free 2-in-1 credit card reader that accepts magstripe and chip credit cards. The platform offers pay-as-you-go pricing, a free POS app, and a free back-office for easy business management.

Every Payanywhere plan includes:

  • Customer, employee, and inventory management
  • Next-day funding
  • Invoicing and virtual terminal payments


  • Transaction fees for swipe, chip, or tap payments: 2.69% per transaction
  • Transaction fees for keyed-in transactions: 3.49% + $0.19 per transaction
  • Card reader: first 2-in-1 reader is free, each additional reader: $29.95
  • 3-in-1 reader that reads swipe, chip, and contactless payments: $49.95


  • Accept payments in-store, online, or on-the-go
  • Robust reporting options
  • Accept offline payments
  • Credit card readers work with iOS, Android, and PCs


  • $3.99/month inactivity fee after 12 months of inactivity
  • Limited pricing transparency (there may be hidden fees)
  • Limited customer service, mostly reserved to an online bot

Do credit card readers store information?
Credit card readers only store information if you enable that feature within the mobile app. Just swiping or inserting a chip card won't save anything. You must have a customer database in place with Store Information enabled to store the information for future use.

Best for Ecommerce Businesses With In-Person Sales: PayPal Here

PayPal Here seamlessly integrates with its ecommerce program, which lets you manage your sales in one place. It offers flat-rate pricing, a free mobile POS, and includes a free chip and swipe reader.

PayPal Here includes:

  • Free app that turns your mobile phone into a point-of-sale-system
  • Multiple card reader options including chip and swipe, chip and tap, and a chip reader with pin pad
  • Inventory and employee management
  • Access to sales reports
  • Business tools including automated tax calculations, adding tips, and applying discounts


  • Transaction fees per swipe, dip, or contactless in-person payment: 2.7%
  • Transaction fees per keyed-in transaction: 3.5% + $0.15
  • Chip and swipe reader: $24.99
  • Chip and tap reader: $59.99
  • PayPal chip card reader: $99.99


  • No setup fees or monthly fees
  • Established and well-known processor
  • Accept all payment types, including PayPal payments
  • Same rate for all credit cards including American Express


  • Only a few simple features
  • High pricing for high-volume merchants
  • Expensive equipment compared to other processors

Best for Businesses With More Than $20,000 in Monthly Sales: Dharma

Businesses with higher ticket items and at least $20,000 in monthly sales benefit from Dharma's low processing fees. You'll pay slightly more for the readers themselves. But the lower processing fees make up the difference.

Dharma includes a free mobile POS app that lets you customize settings, save customer payment information, send electronic receipts, and more.

All plans include:

  • Virtual terminal
  • Strong reporting options
  • Custom receipts
  • Free mobile app
  • Accept payments right from the home screen with the "Quick Pay" option


  • Transaction fees: 0.15% + $0.07 per transaction (above interchange)
  • American Express processing fees: 0.25% + $0.07 per transaction (above interchange)
  • Monthly fee: $20
  • Walker 2 Chip and Swipe Card Reader: $99

If you process more than $100,000 per month, the standard transaction fee rate falls to 0.10% + $0.07 per transaction (above interchange).


  • No long-term contracts
  • No monthly minimum sales requirements
  • Free cost analysis to compare your current provider's fees before you switch over
  • Compatible with Apple and Android devices


  • Not suitable for sellers with less than $20,000/month in sales
  • Approval is not automatic; it can take a few days to get approval and setup
  • $20 fee for each chargeback

Other Credit Card Readers to Consider

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Here are some other card readers that may suit your business.

Best credit card reader for craft shows
Square, our pick for top overall credit card reader, is the easiest credit card reader for craft shows. If you don't want to spend any money upfront, use the free magstripe reader and collect your payments. You can set up an online store with the free POS. Or, use it to manage the back-end of your business and keep track of your sales and inventory. You can even use the Square POS to track cash and check payments.


Shopify is known for ecommerce but offers a mobile processing option too. Current Shopify can use Shopify Payments without extra fees. All sales and customer data sync with your online Shopify store.

You can avoid the extra payment processing fee by using Shopify Payments. Shopify also provides a free card reader that plugs right into your mobile phone for easy credit card processing.

Your transaction fees vary based on the Shopify plan chosen:

  • Basic Shopify Plan ($29/month): 2.7% per transaction
  • Shopify Plan ($79/month): 2.5% per transaction
  • Advanced Shopify Plan ($299/month): 2.4% per transaction
  • Tap & Chip Reader: $49
  • Chip & Swipe Reader: $29


  • Seamless integration for current Shopify ecommerce customers
  • Works with Apple and Android devices
  • Robust POS features that integrate with your online store
  • Store customer payment information for fast processing


  • Hefty monthly fees
  • High risk of frozen funds and canceled accounts
  • Potential 30-day payout period if Shopify considers your business to be high risk

Intuit GoPayment

If you already use QuickBooks, Intuit GoPayment may be a good option. Users get instant QuickBooks integration, which helps to cut down on bookkeeping efforts.

You'll also get a free mobile credit card reader that can accept swipe, chip, or tap payments. GoPayment doesn't have monthly fees or upfront costs.


  • Transaction fees: 2.4% + $0.25 for all credit cards including Visa, Mastercard, AMEX, and Discover
  • Keyed-in transaction fees: 3.4 + $0.25
  • Chip and magstripe card reader: Free
  • All-in-One Reader for swipe, chip, and contactless payment: $49


  • Pay-as-you-go pricing with no long-term contracts
  • Receive funds as soon as the next business day
  • Sync instantly with QuickBooks
  • Pull all product, tax, and tip information right from QuickBooks for quick setup


  • Must buy QuickBooks to get the full benefit of the seamless integration
  • Non-transparent fees: there may be hidden fees involved
  • Monthly processing limits may exist (it varies by merchant)


Fattmerchant offers a free mobile app that allows you to instantly accept keyed-in transactions. They also offer a few mobile credit card readers that work via Bluetooth connection. The readers and app work on both Apple and Android devices. You can accept swipe, chip, and contactless payments with Fattmerchant.

Fattmerchant offers:

  • Invoicing
  • Inventory management
  • Barcode scanning
  • Powerful analytical dashboard


  • Basic Plan: $99 monthly fee plus $0.15 in addition to interchange fees
  • Enterprise Platform for larger businesses: $199/month plus $0.12 in addition to interchange fees

Fattmerchant doesn't disclose the cost of their mobile credit card readers. You must get in touch with them to discuss your needs first.


  • No cancellation fees
  • 24/7 technical support
  • Integration with QuickBooks Online
  • Track cash with the Fattmerchant mobile app


  • Only for U.S.-based businesses
  • A lackluster mobile POS
  • Not viable for infrequent credit card sales

What to Look for in a Credit Card Reader

With all of the credit card reader options available, how do you know which one is right for you? Here are some good places to start.

Look closely at fees for:

  • Card processing
  • Equipment (typically a one-time charge)
  • Transactions
  • Monthly fees
  • Monthly minimum requirement
  • Early cancellation fees

Consider how you'll connect your credit card reader. If you're in a physical store, you probably have Wi-Fi. But if you are out and about, you may need a 3G or LTE connection.

Ease of Use
Most credit card readers are simple to operate — just plug it into your headphone jack or connect via Bluetooth. But you'll want a POS app that's equally user-friendly, particularly in how it integrates with your ecommerce store.

Make sure your reader provides the features you need, such as:

  • Inventory
  • Invoicing
  • Tipping
  • Discounts
  • Tax calculations

Use a credit card processing company that includes PCI compliance. Managing it on your own is risky. You also need a platform that offers end-to-end encryption and doesn't store credit card data.

What the Experts Say

CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

You'll find the best credit card readers use the top credit card processing companies. But readers aren't a one-size-fits-all tool. Look at each factor and decide how it affects your business.

Be sure not to jump at the first free reader you find. You should take some time to review the monthly fees, processing fees, and POS features.

Write to Kim P at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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