Mobile Card-Processing Machines for Marketers on the Road

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People do not carry as much cash as they once did, relying instead on debit and credit cards for even a cup of coffee. But until recently, entrepreneurs, trade show exhibitors and other small-business people who sell products on the road had to lug around a bulky machine and a stack of paper slips to process the cards, or risk losing business.

By MARTHA C. WHITE

Published: April 9, 2012

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Jessica Kourkounis for The New York Times

Sara Selepouchin, who sells housewares, used Square to accept payments at a recent show in Philadelphia.

Alesia Shute, an author whose childhood battle with cancer became the subject of her writing, motivational speaking and advocacy career, said she lost book sales because she did not accept cards.

"A lot of people don't carry cash anymore," Ms. Shute said. "They're not carrying their checkbook in their handbag. They're carrying a debit card." At one fund-raiser, she said, she had to send a would-be donor to an A.T.M. for cash.

About a year ago, Ms. Shute joined a contingent of small-business people using a new device that has revolutionized the payments process by allowing anyone with a smartphone or tablet that uses the Apple or Android operating system to process credit and debit cards.

Users say processing transactions with mobile readers — small attachments that plug into a phone's headset jack — is quicker, cheaper and less cumbersome than using the old machines that make hard-copy imprints of cards and are called "knuckle busters" in industry slang.

"The biggest thing is the portability," said Steve Chorazewitz, chief operations officer of Bottle Docker, a company that manufactures accessories for beverage containers. He exhibits the company's products at consumer trade shows, festivals and other events several times a year.

Sara Selepouchin, an illustrator who travels once or twice a month to sell her line of embellished housewares at craft and trade shows like the New York International Gift Fair, said she, too, had been converted. "When I travel, I try to slim down as much as I can," she said. Her card reader is so small, "I put it in the change purse of my wallet," she said.

To process a payment, a customer's card is swiped through a slot in the reader and the data is sent to a mobile application on the merchant's phone. Customers "sign" the screen using a finger and a receipt is sent to the buyer's e-mail address or cellphone as a text message.

The mobile payment tools also help protect customers' credit card information, said Philip Blank, managing director for the security, risk and fraud practice of the financial services research company Javelin Strategy and Research. No hard copies exist for a thief to steal. Buyers' card information is not stored on the seller's handset, and customer account information is encrypted, he said.

"The problem with the old-school machines is it's very easy for someone to make a copy" of the printed card information, Mr. Blank said.

Ms. Selepouchin said the reader gave her peace of mind in this regard. "It always made me nervous because I'd be walking around with not only cash but 75 or 100 people's credit card information in paper form," she said. "It wasn't secure at all."

A few players operate in this field. Square Inc., begun in 2010 by Jack Dorsey, a Twitter co-founder, is one. EBay introduced its PayPal Here device in March. Intuit, the tax and accounting software company, offers a similar device called GoPayment.

In March, Eventbrite, the online ticket seller, introduced a credit card swiper that plugs into an iPad 's charging slot and is aimed at organizers of conferences, concerts and other events. Eventbrite's device can be used to sell tickets and merchandise at event sites.

Megan Quinn, director of products for Square, said that more than half of the merchants using Square had not previously accepted credit cards. "By accepting credit cards on Square, they're actually processing more transactions and seeing greater profit," she said.

Processing payments via smartphone also speeds the payments, generally completing them within a couple of days at most. Processing hard copies of credit card payments could lead to a delay of at least several days before a payment was posted to the merchant's bank account.

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