Accept Credit Card Payments from Your iPhone, iPad, or Android

Last Updated May 19, 2010 12:14 AM EDT About 15 years ago, a musician friend of mine asked me if I could recommend a good way to take credit card purchases on the go. That way she could easily take credit for t-shirt and CD sales at concerts. At the time, I didn't know of many practical solutions. If only she asked me today, I'd finally have a great option for her to consider. Square is a mobile credit card authorization system for iPhone, iPad, and Android -- with more devices to be supported later. To use the service, you get (for free) a small credit card reader that plugs into the phone's audio jack. Customers sign their name on the phone, and the transaction is authenticated for a fee of 2.75% plus 15 cents. If your business is mobile and you have been waiting for an easy way to take credit card payments on the go, definitely give Square a look. Continue Reading

Square: A Free and Easy Way to Accept Credit Card Payments

Last Updated May 12, 2010 8:37 AM EDT Talk about a game-changer: Square lets anyone with a smartphone accept credit card payments. I'm so blown away by this service, I don't even know where to start. Okay, I'll start with costs: there are none. The app is free. The service is free. The card reader for your device is free. Square charges nothing for setup and no monthly fees. You don't need a merchant account like you do for a traditional credit-card terminal. And there are no monthly minimums. Want to hear the catch? The aforementioned card reader -- the "square" in Square -- plugs into the headphone jack of various mobile devices. The headphone jack! That's some clever voodoo right there. Swipe a card, tap in the amount, let the customer add a tip (if applicable), and presto: you've got payment. Everything's secure and private. I think Square has the potential to be the next PayPal. To me it looks like a killer solution for small businesses, charities, service providers, and anyone needing to collect payment outside of a traditional retail location. Square is available now for Android, iPhone, iPad, and iPod Touch. The company is working to deploy it to other devices as well, so I assume a BlackBerry version is imminent. What do you think about this? Too good to be true, or a dream come true? Let's hear your thoughts. In the meantime, check out Square's slightly dorky promo video: Continue Reading

How to Accept Credit Card Payments for Next to Nothing

Last Updated Feb 28, 2011 4:49 PM EST When you run a small business, every penny counts. And one of the most maddening costs for a business owner is credit-card transaction fees. Well, I'm happy to report that one of the best merchant deals on the planet just got a little better. I'm talking about Square, the smartphone-based credit-card payment system. The reader is free, and you pay only a competitive per-transaction rate and fixed fee. Or, at least, that was the deal. As of last week, Square no longer charges a 15-cent fixed fee on payments accepted with the Square reader. Now, you pay only the 2.75% per-transaction rate. (Hey, 15 cents may not sound like much, but it adds up! If you enter a card number manually, however, the 15-cent fee still applies.) In case you're wondering, the industry standard for credit-card processing is around 2.95%, plus 30-45 cents per transaction. Many banks will also charge you a hefty merchant-account application and/or setup fee, which Square does not. Indeed, I recently set up my own Square merchant account, and my total out-of-pocket cost was zero. The free card-reader (which measures all of one inch square) arrived by mail -- again, free of charge -- in about a week. I plugged it in, fired up the free Square app (currently available for Android, iPhone, and iPad), and instantly processed my first payment. The whole thing was ridiculously easy -- quite a contrast from the endless hoops I had to jump through years ago when I launched a magazine. In other words, this is by far the fastest and easiest way to set up a merchant account I've ever seen, and it has the advantage of being completely portable. I still love the fact that the reader plugs into your headphone jack; it's not some bulky custom case the works only with select models. Early last month I named Square one of the best business gadgets of 2010. Now that it's available for Android and costs even less per transaction, it's in the running for 2011 as well. My only Continue Reading

The Square Credit-Card Reader Controversy: How Verifone’s Smear Campaign Went Bad

Last Updated Mar 21, 2011 10:09 AM EDT Regular Business Hacks readers know of our fondness for the Square, a smartphone-powered gizmo that allows merchants to accept and process credit-card payments for next to nothing. We're so fond of it, in fact, that we named it one of the top business gadgets of 2010. So imagine our surprise when Verifone CEO Douglas Bergeron released an open letter -- and set up an entire Web site -- citing "a serious security flaw that Square has overlooked that places consumers in dire risk." What's the problem? According to Bergeron, the Square hardware (which plugs into your phone's headphone jack) is easily hacked, meaning criminals can "turn the device into a skimming machine in a matter of minutes." Scary, right? Well, yes, until you look at the facts:Verifone is a Square competitor, a Goliath to tiny upstart David. It would be one thing if Visa or MasterCard had raised concerns about Square security, but when a competitor does it, you can't help but question the motives. Similarly, it can't be a coincidence that Verifone's letter arrived just a week or so after Square announced that it was eliminating the 15-cent fixed transaction fee on credit-card payments. The industry standard: 30-45 cents per transaction. As Square CEO Jack Dorsey rightly pointed out in his response to Verifone, credit-card fraud is not new. "If you provide your credit card to someone who intends to steal from you, they already have everything they need: the information on the front of your card." [Italics are mine.] Furthermore, banks don't hold consumers responsible for fraudulent transactions, regardless of how they occur. Bergeron's letter may be addressed to "the industry and consumers," but there's no mistaking its intent: to frighten consumers away from Square and toward "secure payment systems, like those provided by VeriFone." Could the Square be used by criminals? Absolutely. Are you a criminal? Of course not. So there's zero risk for you to use the Continue Reading

The Square Credit-Card Reader Controversy, Part 2: Did Verifone Win?

Last Updated May 2, 2011 11:39 AM EDT Back in March, credit card processing giant Verifone tried to put the smackdown on mobile-payment upstart Square, with the CEO of the former citing "serious security flaws" in Square's smartphone-savvy card reader. As you may recall, the smear campaign backfired bigtime. Verifone emerged looking like a big corporate bully, while Square CEO Jack Dorsey came across as classy and measured in a straightforward, informative open letter to customers and consumers. Game, set, match? Not quite. An unofficial Round Two kicked off last week when Square announced a forthcoming new version of its card reader. What's different this time around? New encryption-oriented security features -- exactly what Verifone faulted the device for lacking. Meanwhile, Dorsey's aforementioned letter has been taken down from Square's site. Is this an admission that Verifone was right? Not necessarily: Square's announcement came on the heels of Visa's new mobile acceptance best practices. Don't see the connection? Visa recently became a Square investor. So one could argue that Square was just following the guidelines set by one of its partners, or that the company was merely making inevitable improvements in the all-important area of card security. A lot of this is open to interpretation. Fortunately, it doesn't change much for you, the business owner. The Square remains one of the most affordable and convenient tools for processing mobile payments, with no security risks to speak of from a merchant standpoint. More on BNET: 6 Dirt-Cheap Ways to Launch a New Business How to Save Money on Your Next Laptop Five Ways to Cut Costs in 2011 Continue Reading

Amazon debuts mobile payment app and card reader

NEW YORK - Amazon (AMZN) is taking direct aim at mobile payment systems such as Square by introducing the Amazon Local Register, a credit-card processing device and mobile app designed to help small business owners accept payments through their smartphones and tablets. The move places the largest U.S. e-commerce retailer in competition with Square and other established mobile payment processing systems such as PayPal Here and Intuit's GoPayment. Amazon's technology includes a card reader that attaches to a smartphone, Kindle or tablet. The reader processes credit or debit card payments via a secure Amazon network, the same one that processes purchases. The service is designed to serve on-the-go small business owners who might otherwise only accept cash or checks, including massage therapists, food truck operators and artists who sell their work at outdoor fairs. Small businesses can start using Local Register by creating an account. Businesses must buy Amazon's card reader for $10, and download the free mobile app from the Amazon app store, the Apple app store or Google Play. The app works on most smartphones and tablets, including the Kindle Fire. Similar to Amazon's strategy in many of its businesses, the company aims to compete on price in the mobile payment arena. For customers who sign up for the service by Oct. 31, Amazon will take as its fee 1.75 percent of each payment processed, or each "swipe" of the card, a special rate that will last until Jan. 1, 2016. For people who sign up after Oct. 31, Amazon will take a service fee of 2.5 percent of each payment processed. The first $10 in transaction fees will be credited back to the customer, essentially paying for the card reader. That's below most of its competitors' rates. Square takes a fee of 2.75 percent of each transaction. PayPal Here takes 2.7 percent of each transaction and Intuit's GoPayment rates start at 1.75 percent per transaction if businesses pay a $19.95 monthly rate or 2.4 percent of Continue Reading

Outdated credit card tech costing U.S. billions

Every time you swipe your credit or debit card, whether it's at a gas station, supermarket or ATM, you're gambling with your money. Some thieves are capitalizing on outdated technology in your wallet, reports CBS News correspondent Anna Werner. If you think you protect your credit card information, talk to New York City's Cassandra Tang, who found that the card that was still in her wallet had somehow been used to take out $200 at an ATM across town she'd never been to. "We use our credit cards or debit cards or whatever every day and it's scary to know that my card could be compromised," Tang said. Her credit card company told CBS News she probably fell victim to card skimming, in which thieves got her information, then made a duplicate card complete with a new PIN number. Fraud expert Scott Schober said that is now common. A recent study showed someone falls victim to identity fraud every two seconds. Nearly 13 million Americans were affected last year alone, costing the U.S. about $6 billion. "Because we are using old technology, it's extremely easy to hack and get this information," he said. Thieves can simply swipe using a small card reader and go. Once it's stolen, Schober said, customers' personal information can wind up on the "darknet," the underbelly of the Internet. On one site, someone is offering to clone credit cards and provide "samples" of more than a dozen consumers' stolen information. "As you scroll down, you can start to see there's their phone number, their full address," Schober said. The information also includes full credit and debit card numbers complete with their respective PIN numbers. "So if you wanted to take out money right now, you could go down to the local ATM and take that money out, or do an online purchase," Schober said. But years later, one victim of credit card fraud, Louis Gazzo of New Jersey, still has his private information out there, including something he didn't expect -- his mother's maiden name. "When someone steals Continue Reading

Detroit panhandler claims to be first to accept credit card donations with cellphone card reader: ‘being homeless is my business’

No change? No problem. This panhandler takes all major credit cards. A high-tech Detroit homeless man named Abe “Honest Abe” Hagenston claims to be the first person on the streets outfitted with a card reader on his cellphone for donations. “I’m the only homeless guy in America who can take a credit card. It’s all done safely and securely through,” Abe told CBS Detroit. “I take VISA, MasterCard, American Express,” he said.  Hagenston, 42, who goes by the nickname “Honest Abe,” has been homeless for seven years in Detroit and has adopted digital tools to solicit odd job opportunities and street donations. He says he brings in about $20 to $50 a day from the generosity of strangers who drive by the highway overpass where he sleeps and give him a tip in change or with the swipe of a card using the Square reader.  Square readers cost around $10, plug into the headphone socket of iPhones and Androids, and charge users 2.75% per swiped transaction through a free app.  It's unclear how many people have entrusted "Honest Abe" with their credit card information.  The innovative street dweller also started a website he created using a computer at a local public library.  “My business is being homeless, now homeless is my business,” reads Hagenston’s slogan on his website. Hagenston tries to earn extra money by working odd jobs, but he said he hasn’t been able to shovel snow, a usual source of income for him in the winter, because of the mild weather in Detroit. “It’s not really that easy, what we’re lacking is snow,” Hagenston lamented to CBS Detroit. His website boasts that Hagenston also does “a lot of painting, computer work and yard work for people.” The site also solicits job opportunities for other homeless Continue Reading

Amazon’s new Local Register offers small businesses a mobile reader for credit card payments

Amazon is courting brick-and-mortar small businesses as it moves into the burgeoning mobile payments market. The online retail giant on Wednesday launched Amazon Local Register, a credit and debit card reader that connects to a smartphone or tablet for easy point-of-sale payment. The new system, in which a merchant swipes a credit card through a portable reader to record a sale, is similar to services offered by Square, eBay’s PayPal Here and Intuit’s GoPayment that are geared to small-biz owners and entrepreneurs. But Amazon’s reader is being introduced with a lower transaction fee than its competitors that will make it ultimately cheaper to use. Merchants who implement Local Register before Oct. 31 will pay a rate of 1.75% for each transaction through January 2016, compared with Square’s 2.75% rate and Paypal’s 2.7%. Amazon’s rate will go up after the promotional period, but users will still pay less than the competition at 2.5% per swipe. The reader, available now on, costs $10 and is delivered within two days with free shipping (it’ll be sold next week at Staples stores). The first $10 in transaction fees will be credited back to the user’s account, so the reader is basically free, the company said. “For Amazon, it’s a strong strategic move in a category that’s doubling every three to four years in terms of revenue,” Burt Flickinger, managing director of Strategic Resource Group, a consumer industry consulting firm, told the Daily News. Mobile payments “is a high-margin business with low-margin competition, and it’s an opportunity for Amazon to save shoppers and business customers a material amount of money,” Flickinger said. Join the Conversation: Continue Reading

Chip-and-PIN credit cards soon to become U.S. standard

Question: Is there a way for me to make a chip and PIN credit card usable only in a chip and PIN reader by disabling the magnetic stripe?Answer: Chip and PIN refers to the EMV (Europay, MasterCard and Visa) "smart card" that has been adopted in many countries around the world to improve security on credit cards.'Chip' refers to a computer chip embedded in the card (usually a small metallic square) and PIN refers to a personal identification number you would set up to work with the card.The process is very much like how you use your debit card to make purchases now, but it's a whole lot more secure.The current standard in the U.S. is the magnetic stripe, which contains everything necessary for a thief to replicate the card and sell it.That's why you keep hearing about so many high-profile data breaches and skimming scams in the US.Hackers have been targeting POS (point-of-sale) systems at major retailers because they want to steal the information necessary for "cloning" credit cards. The same holds true for skimming scams, where a fake credit card reader is used to swipe the magnetic information on a card, so it can be reproduced.The EMV process would make these types of hacks pretty useless because each embedded chip is uniquely encrypted for a specific card and requires the associated PIN, which is not stored on the card.Unlike magstripe cards, every time an EMV card is used for payment, the chip creates a unique transaction code that cannot be used again.If a hacker steals the chip information from a specific transaction, card duplication wouldn't work because the one-time transaction number created for that purchase wouldn't be usable again.The U.S. is far behind in adopting this higher security standard (even North Korea is ahead of us!), primarily because of the cost to both card issuers and merchants, but that's about to change.The industry has mandated that retailers install chip and PIN-compatible card readers by Oct. 1, 2015. Retailers that don't will be Continue Reading