UK Mobile Card Reader Comparison

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With plenty of mobile credit card readers on the market now, and more appearing by the week, I thought it was time to launch a new section of PaymentBrain dedicated to these devices.

Here’s our new tool to compare mobile card readers.

For now, at least, all the main providers have opted for transaction fees of 2.75%, The main differences between solutions are the initial cost of the card reader hardware and the way in which Visa transactions are validated (this can be via direct PIN entry or via an SMS message).

Mobile Credit Card Readers – a Guide for UK Business Owners

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Credit card payment with iZettle

Accepting credit card payments is becoming easier and cheaper these days for UK business owners. A number of new services have sprung up to replace the clunky credit card machines we’ve been used to seeing so far. These new services offer slick ways to accept credit card payments via standard, multi-purpose mobile and tablet devices.

Which Mobile Credit Card Reader Device is Best for UK Merchants?

Here’s an overview of the services currently available and the main pros and cons of each. Note that this is liable to change quickly as providers frequently update their offers and new developments are released.

iZettle

Allows you to accept credit card payments via an iPad, iPhone, iPod touch or Android device. They provide a credit card reader that plugs into the device in question.

For security reasons, when making Visa payments, customers need to do some extra verification via their own smartphone.

Positives: Dongle attaches conveniently to your mobile device.

Negatives: Visa payments require an extra verification step.

Cost for card reader: £20 (but includes £20 in free transactions)

Transaction fee: 2.75%

Website: www.izettle.com

[Update: iZettle are now offering a Chip and PIN reader, currently priced at £49.]

SumUp

SumUp’s service is also based on a credit card reader that you plug into your mobile device. Like other providers, they support Android and Apple smartphone and tablet devices.

For security reasons, when making Visa payments, customers need to do some extra verification via their own smartphone.

Cost for card reader: free

Transaction fee: 2.75%

Positives: Free credit card reader.

Negatives: Extra step needed for Visa payments.

Website: sumup.co.uk

Payleven

Payleven is a mobile credit card reader system that involves two parts: first, an app that runs on your iPhone, iPad or Android phone or tablet; second, a bluetooth chip & PIN card reader.

The app displays the amount due and the customer then inserts their credit or debit card into the separate chip & PIN card reader and enters their PIN code.

Cost for card reader: £99 (currently £49)

Transaction fee: 2.75%

Positives: The PIN entry system makes Visa payments more straightforward.

Negatives: Cost of the reader and need for two separate devices that are not attached to one another.

Website: payleven.co.uk

Intuit Pay

A new service currently being trialled by Intuit, it’s not yet clear from the company’s marketing materials whether this will be a dongle-based solution similar to iZettle, SumUp and Payleven, or whether Intuit have found a way to avoid the need for extra hardware.

Transaction fee: not yet announced

Details: Currently being trialled. You can currently register for their trial here.

Website: www.intuit.co.uk

[Update: the service has now been fully launched and is available here.]

mPowa

Another service that, when it launches, looks set to be based around a Chip and PIN reader. Merchants who pre-register are currently being offered a free £25 voucher off the eventual cost of the card reader.

Cost of card reader: £49.99 (but £25 off voucher currently available here)

Transaction fee: 2.95%

Website: www.mpowa.com

A Note About the Two (Current) Ways of Verifying Visa Payments

Verifying credit card payments in person in the UK has traditionally been done using a dedicated Chip and PIN credit card machine. A credit card is inserted into the machine, allowing the device to read the chip and identify the card. The cardholder then types in their PIN as a further verification of their identity.

The first of the new wave of mobile credit card readers on the market were based on solutions that didn’t require a PIN to be entered. This was great for usability, but less good for security. Unsurprisingly, Visa quickly clamped down on these services, making clear that the verification step was obligatory.

The current offerings have found one of two ways to handle the Visa verification step:

  1. Verification via separate chip & PIN card reader
  2. Verification via consumer’s own smartphone

Verification via the consumer’s own smartphone makes for a more complicated purchase experience, so it’s possible that all the major providers will switch to a chip & PIN card reader.

Braintree Payments Launch in UK

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BraintreeBraintree, a well-funded US payment processing company, has now launched a UK service.

Braintree offer a payment gateway with a good range of features that has become popular amongst trendy technology startups in America. They are known for having a developer-friendly API that makes it relatively easy to integrate with websites.

The company received $34 million in venture capital funding from Accel Partners in 2011. I expect them to quickly grab mindshare here in the UK with our local technology startups and to expand from there to more mainstream merchants.

Braintree recently acquired mobile payments company Venmo, so look out for some interesting mobile offerings from them, too.

Personally, I think the arrival of companies like Braintree is a great thing for UK merchants as it will give extra encouragement to existing payment gateways to improve their APIs and over all service.

SumUp Enters Battle of the UK Smartphone Credit Card Readers

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SumUp Smartphone Credit Card Reader

SumUp is the latest company to release a smartphone credit card reader suitable for UK retailers.

Competing with services such as iZettle and mPowa, SumUp also provide a card-reading dongle to attach to your Apple or Android phone or tablet.

Importantly, SumUp accepts both Visa and MasterCard. For MasterCard payments, customers enter a signature on the device. Visa payments are reportedly verified using a clunky-sounding process involving a secure SMS.

SumUp charges a flat 2.75% transaction fee, with no monthly charges. The app and card reader are free. This pricing makes it competitive with iZettle and cheaper than mPowa’s current offering.

[Update: see our round-up of UK mobile credit card readers.]

iZettle vs mPowa vs PayLeven vs PayPal Here

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Credit card payment with iZettle

iZettle, mPowa, PayLeven and PayPal Here are all looking to do something big: change the way in-person credit card payments are taken.

Currently, to take credit card payments, merchants need a dedicated credit card terminal: the device you slot your credit card into with the little keypad you type your PIN code in with.

These cost around £15 to £35 a month to rent which has made them unattractive to many small merchants who have often opted not to take card payments at all.

If iZettle, mPowa, PayLeven and PayPal Here have their way, though, credit card machines could soon be a thing of the past.

Smartphone Credit Card Readers

The four companies are working on ways to let you take credit card payments using your smartphone, iPhone or iPad.

They mostly work by letting you plug a special card reader into the top of your device.

A company called Square (founded by one of the founders of Twitter) is already seeing great success offering a similar device in the US.

Mobile Credit Card Reader Fees

iZettle currently charge a transaction fee of 2.75% for MasterCard, 2.95% for AmEx and 2.75% for Diners Club, with no setup fee or monthly fees. It’s not clear how much they charge for Visa or whether debit cards are charged at a different rate. [Update: it appears they don't yet support Visa.]

mPowa charge 2.95% plus 25p per transaction.

PayLeven and PayPal Here have yet to launch in the UK so it’s unclear how they’ll compare price-wise.

For now, iZettle’s offering looks the most compelling. They’ve raised investment money of $46.7 million so far, and look to be using that to grow aggressively, particularly in the UK.

Is a Mobile Phone Card Reader Right for You?

Are you interested in getting a mobile phone credit card reader? What questions and concerns do you have?

[Update: You may like to see our more recent roundup of UK mobile payment card readers.]

Jumio’s Netswipe Turns Your Webcam into a Credit Card Terminal

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Hand holding credit card in front of a webcam

Jumio is a company developing some innovative image recognition technology. Last year they launched their first product, Netswipe. It could shake up the way payments are taken online.

Netswipe is a technology that allows Internet retailers to process payments by having customers ‘swipe’ their credit cards using virtually any webcam. Jumio’s technology reads the card details rather than the user having to type them in.

In a world like e-commerce where conversion rate can be critical, this could make the difference in helping a few extra customers complete their purchases. I, for one, haven’t yet seen this technology being used ‘in the wild’ yet, though. Have you?

Anyhow, it’ll be exciting to see where this technology goes next. Jumio have just raised $25.5 million of new funding, so I’m expecting more exciting things from them in the future.

PayPal Automatic Billing for Variable Recurring Payments

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Towards the end of last year, PayPal introduced PayPal Automatic Billing. It’s a new payment option that could be interesting if you need to take recurring payments from your customers where the amounts may vary with each payment.

PayPal Automatic Billing works with PayPal Website Payments Standard accounts (rather than Website Payments Pro).

Before Automatic Billing was available, you could already take recurring payments with PayPal’s Subscriptions and Billing service. What’s new here is being able to charge different amounts from payment to payment. This could be very useful if you’re looking to charge for usage.

Like the existing PayPal Website Payments Standard offerings, Automatic Billing is implemented via customisable buttons that you create via your PayPal account, then paste into your website. It looks like it could be a useful low-tech solution for smaller businesses wanting to do usage-based billing.

When it comes to recurring billing, there are now lots of services out there. They typically allow you to set up different pricing plans (e.g. £10 per month and £20 per month), but for now very few offer this kind of usage-based billing. We’ll be doing a full review of recurring payments services soon.

If you’re trying out PayPal Automatic Billing, let us know how you’re getting on.