While some cell phone credit card processing methods, like those associated with the Smart reader, raise the potential for fraud due to a lack of encryption, charge card terminals tied to the Apple iPhone are offering a low cost processing solution for some merchants. The combination of comparable security in a more mobile package at an entry price point of $80 to $150 is certainly attention getting, in both a positive and negative sense. There are just as many people who look askance at the iPhone terminals as those who are intrigued by them. So what’s the real story?
IPhone-based cell phone credit card processing uses the same encryption methods as a traditional terminal and, because of the smaller form factor, the card can be swiped in front of the customer rather than carried away, an old-school practice at which many people now look askance. Once a card it out of the holder’s eyesight, for instance in a restaurant setting, there’s little protection against potential fraud beyond simply trusting in the honesty of the person who carried the card away. Sadly, that level of trust no longer exists in our society for good reasons given the near epidemic levels of identity theft and card fraud in recent years.
One crucial thing to remember about mobile credit card processing with the iPhone is that the device does not store the credit card information. Employers can issue iPhones and mobile terminals to their workers with a high level of confidence. The phone’s many other uses will undoubtedly enhance the workers’ performance, and he or she will always have a card terminal in their possession, which significantly lessens the chance of missing a sale, no matter how unlikely the circumstances might otherwise be.
Since more terminal solutions are being developed for the iPhone, you should use the same level of due diligence you would apply in assessing any merchant account service. You will not only want a breakdown of all associated fees, but also a full explanation of the security measures built into the device. Additionally, find out about any early termination fees or costs associated with loss of or damage to the equipment itself, including the iPhone.
The highly mobile nature of the device, tied to the cutting edge cachet associated with all things iPhone makes this level of mobile credit card processing a viable solution for any company that needs on the go point-of-sales technology. Since the devices use the same level of encryption as a regular terminal, and do not store the cardholder’s information, iPhone-based terminals are definitely making significant inroads in mobile payment technologies.