Credit card readers are devices that accept and process payments through a smartphone or tablet, along with point-of-sale (POS) software. Many processors offer free or low-cost readers and charge a monthly fee and transaction fees. The best solutions have low processing fees and come with POS apps to process sales and view reports.
The best credit card readers for 2020 are:
- Square: Best overall credit card reader for small businesses
- PayAnywhere: Best for businesses that sell inexpensive items
- Shopify: Best for businesses that sell online in addition to in-person transactions
- Dharma: Low-cost option for established businesses
Which Payments Provider is Right for You?
How We Evaluated Credit Card Readers
Payment processing fees are a top consideration when evaluating credit card readers. However, a company’s payment features, chargeback policies, hardware options, and customer service are also important. For example, you might need a mobile credit card processor that can work without an internet connection, or that can sync with your online store. Furthermore, some companies have high fees for chargebacks, which can end up costing you in the long run if you deal with chargebacks regularly.
So, we evaluated credit card readers by payment processing fees, hardware pricing, payout time, ease of use, chargeback policies, overall features, and user reviews.
Credit Card Reader Pricing Comparison
2.6% + $0.10
Interchange + 0.15%
Credit Card Reader Cost*
1 Day (same-day for extra fee)
*Included lowest-cost card reader with EMV and chip payment capabilities.
Square: Best Overall Credit Card Reader for Small Businesses
Square offers the best credit card reader and payment processing service for small businesses. Square is versatile, with a variety of credit card readers, whether you need an online, mobile, or countertop solution. Plus, the powerful POS software includes free business management tools. Not to mention, it has a great chargeback dispute system, which can be a game-changer for businesses that have dealt with unwarranted chargebacks.
Processing fees are high for small transactions (under $25)
Easy chargeback dispute
Customer service can be difficult to reach
Free POS, inventory, and customer management tools
Account instability (funds can be reserved at Square’s discretion)
- Monthly fee: $0
- Swipe, chip and contactless payments: 2.6% + 10 cents
- Keyed-in payments: 3.5% + 15 cents
- Ecommerce payments: 2.9% + 30 cents
Square Card Reader Costs
iPad Stand + Reader
$159 (iPad not included)
Connects to phone or tablet via bluetooth. Accepts EMV (chip), or NFC contactless payments (Apple Pay, Android Pay).
Connects via bluetooth and accepts EMV and NFC payments. Optional receipt printer, cash drawer and barcode scanner.
Connects via Ethernet or WiFi (does not require smartphone or tablet). Accepts magstripe, EMV and NFC payments. Provides two touchscreens; one for customer, one for cashier.
Square also provides a free magstripe (swipe) credit card reader for iPhone and Android devices. However, magstripe readers are risky for merchants, as chargebacks on swiped transactions cannot be disputed.
As additional solutions, Square offers a portable terminal and a range of accessories including receipt printers and cash drawers.
Square Card Reader Features
- Point-of-sale: Square provides a POS app that’s packed with features and second only to Shopify, which requires a monthly fee. With Square, you can add your inventory for faster checkout, split sales between different payment methods, allow customers to add tips, and print, text, or email receipts. Square works offline, so you can accept card payments even without an internet connection.
- Business management: Square comes with additional features including invoicing, appointment booking, employee management, and customer email marketing. Furthermore, Square integrates with many other business tools, such as accounting and delivery management.
- Payout time: Square deposits funds into your bank account in one day (or two days if the transaction happens after your regular business hours). Instant transfers are available for a 1.5% fee.
- Chargeback policy: Square has the best system for managing chargebacks. There’s an online portal to view and dispute chargebacks. But even if you miss the deadline, Square will dispute the charge automatically using the data available in the system. If your dispute is unsuccessful there will be a fee from the cardholder’s bank. However, unlike many of the other providers, Square does not charge any extra fees of their own.
- Customer support: Phone, chat, and email support are available Monday to Friday from 9 a.m. to 9 p.m. Eastern time.
Learn more about Square’s ecommerce and business management features by visiting our full Square Payments review.
PayAnywhere: Best for Vendors With Small Transactions (under $25)
Like Square, PayAnywhere also offers low-cost credit card processing with no upfront costs or monthly fees. Where it differs, however, is that PayAnywhere’s flare rate of 2.69% is even better for businesses that sell inexpensive items. For example, if your average transaction size is $10, PayAnywhere will save you about 25% in processing fees compared to Square, who charges 2.6% + 10 cents per transaction.
On the flipside, PayAnywhere does not offer all the advanced payment features of Square such as ecommerce, appointment booking, gift cards, or email marketing. However, for businesses that just need a credit card reader to get the job done, PayAnywhere is a reliable option. It has a great chargeback policy and easy-to-reach customer support.
Very low fees on small transactions
High fees for keyed-in transactions
Free EMV (chip) card reader
Opaque and expensive pricing structure for businesses processing over $10,000 monthly
No added fee for chargebacks
Does not accept international credit cards
- Monthly fee: $0
- Swipe, chip, and contactless payments: 2.69%
- Keyed-in payments: 3.49% + $0.19
PayAnywhere Card Reader Costs
2-in-1 Card Reader
3-in-1 Card Reader
First free, additional $29.95
$349.95 + $9.95/month software fee
Connects to phone or tablet via bluetooth and accepts payments via magstripe (swipe) and EMV (chip).
Connects to phone or tablet via bluetooth and accepts magstripe, EMV as well as NFC contactless payments (Apple Pay, Android Pay).
Connects via WiFi or built-in 4G internet connection (does not require phone or tablet). Accepts magstripe, EMV as well as contactless payments.
PayAnywhere Card Reader Features
- Point-of-sale: The PayAnywhere POS app provides all the main features: Customers can add tips and sign digitally on the tablet or terminal, and you can print, email, or text receipts. The app works offline, so you can process credit cards even without an internet connection.
- Online payments: Send invoices online, or set up recurring payments with autopay.
- Payout time: PayAnywhere deposits funds into your bank account in one business day.
- Chargeback policy: Like Square, there’s an online portal to view and dispute chargebacks. There aren’t any upfront fees to dispute a chargeback, although there is a $25 charge if the dispute is unsuccessful.
- Customer support: Phone, chat, and email support are available Monday to Friday from 8 a.m. to 8 p.m. Eastern time. During my evaluation, my questions were answered immediately
Read our full PayAnywhere review to learn more about the iPhone credit card reader features.
Shopify: Best Credit Card Reader for In-Store & Online Sales
If you’re a business that sells products online as well as in-person, you face some unique challenges. You have to figure out how to manage inventory, process returns, and issue store credit across multiple selling channels. Shopify solves this by combining online and in-store sales into one system. This includes an in-store credit card reader and POS, as well as a full-blown online ecommerce store.
Shopify does require a monthly fee and offers standard processing rates. However, the true advantage of Shopify is in the power of its features. Rather than using separate systems to manage your inventory, order fulfillment, POS, and online store, you can tackle everything with one tool. This makes Shopify an ideal credit card reader for multichannel sellers, pop-up shops, and businesses that sell at events like trade shows or local markets.
Competitive rates for businesses that sell over $10,000 per month
Requires monthly fee
Ecommerce website builder
Does not work offline
Includes delivery management, email marketing, and many other tools
- Monthly fee: $79
- Swipe, chip, and contactless payments: 2.5%
- Online and keyed-in payments: 2.6% + 30 cents
Shopify also has a basic plan that charges only $29 per month but has a higher credit card processing rate of 2.7%. Similarly, there’s an advanced plan for $299 per month that offers a lower processing rate of 2.4%.
Shopify Card Reader Costs
Chip & Swipe Reader
Tap & Chip Card Reader
1 free, additional $29
$229 (iPad not included)
Connects via bluetooth and accepts magstripe (swipe) and EMV (chip) payments.
Connects via bluetooth. Accepts EMV (chip), or NFC payments (Apple Pay, Android Pay).
Includes iPad stand, tap & chip card reader, card reader dock, and cables.
Shopify also has cash drawers and receipt printers.
Shopify Card Reader Features
- Point-of-sale: Of all the providers we reviewed, Shopify has the most advanced POS system. Shopify inventory management can handle all the variants and details that a larger shop requires. You can split sales between different payment methods, process full or partial refunds with store credit, and handle returns and exchanges with ease. One key downside, however, is that Shopify cannot accept card payments without an internet connection.
- Ecommerce website: Shopify is one of the leading ecommerce platforms on the market. It gives you simple tools to create a professional online store, and integrations to sell on Amazon, Facebook and Instagram.
- Payout time: Shopify deposits funds into your bank account in one to three days. Unlike Square and PayPal, there’s no same-day payouts.
- Chargeback policy: Like Square, Shopify has a reliable chargeback dispute system. There’s an online portal to add evidence and dispute chargebacks, and even if you forget, Shopify will file the dispute automatically using the data in your system. There’s no upfront fees to dispute a chargeback, however, if your dispute is unsuccessful there is a $15 charge.
- Customer support: Phone, live chat, and email support are available 24/7.
Learn more about Shopify’s advanced ecommerce and POS features in our full Shopify POS review.
Dharma: Best for Businesses Processing Over $20,000 Monthly
Unlike Square and Shopify, which bundle loads of features into their platforms, Dharma focuses on one thing and one thing only: low credit card processing rates. By charging the interchange rate + 0.15% + 7 cents, It is significantly less expensive than all the other providers, especially when it comes to big transactions. For example, if your average transaction size is $200, Dharma will cost you roughly half as much as Shopify or Square.
The flip side is that businesses must apply to open an account with Dharma, and they’re far more selective with whom they accept. There’s a $20 monthly fee, no chargeback support, and little in the way of POS or inventory management features. Dharma works best when you use a separate POS or ecommerce system, and just want a payment provider that can offer the lowest rates.
Very low fees on larger transactions
Strict application process
Highly-rated customer support
Can’t dispute chargebacks online
Traditional merchant account means funds are unlikely to be frozen
Card readers are expensive
- Monthly fee: $20
- Swipe, chip, and contactless payments: Interchange + 0.15% + 7 cents per transaction
- Keyed-in payments: Interchange + 0.2% + 10 cents per transaction
Unlike the other services reviewed, Dharma does not charge a flat transaction fee. It charges the interchange rate + 0.15% + $0.07. The interchange rate is the actual fee the credit card or debit card issuer charges to process the transaction. It’s different for every type of card, such as Visa or American Express, and for different types of transactions such as swiped payments or keyed-in payments.
Dharma Card Reader Costs
Poynt Smart Terminal
$599-699 + $20/month
Connects to phone or tablet via bluetooth. Accepts EMV (chip), or magstripe (swipe) payments.
Standalone terminal does not require a phone or tablet. Connects via Ethernet or dial-up and accepts magstripe (swipe), EMV (chip) and NFC payments (Apple Pay). Includes built-in receipt printer.
Connects via WiFi or 3G. Accepts magstripe (swipe), EMV (chip) and NFC payments (Apple Pay). Users can sign & tip directly on the touchscreen. Also includes built-in receipt printer.
Dharma also works with the FD-150 terminal, and a range of Clover credit card readers.
Dharma Card Reader Features
- Point-of-sale: Dharma provides a basic POS app called MX Merchant Express. If you’re using the mobile card reader, you can accept payments with tips, on-screen signatures, and email receipts. You can also accept online payments, generate reports, and view a customer database. However, MX Merchant Express does not have nearly the same inventory management or ecommerce features as full-blown POS systems like Shopify or Square.
- Ecommerce: Dharma does not offer built-in ecommerce. However, using the payment gateway Authorize.net, you can integrate Dharma with a range of ecommerce solutions.
- Payout time: Dharma deposits funds into your bank account within two business days. Account-holders can also apply for next-day funding.
- Chargeback policy: Unlike all the other companies we reviewed, Dharma does not provide an online portal for disputing chargebacks. Chargeback notices are sent in the mail, and can be disputed by fax or email. There is also a $20 nonrefundable fee.
- Customer support: Phone and email support are available Monday to Friday from 7 a.m. to 7 p.m. Eastern time.
To learn more about why Dharma is the best credit card reader for larger businesses, read our full Dharma Merchant Services review.
The best credit card readers are typically offered by the best payment processors. Many offer a free standard credit card reader, so you can start accepting magstripe cards, but you’ll be more secure (and so will your customers’ cards) if you opt for one with EMV chip support, or an all-in-one card reader that also accepts contactless and mobile payments such as Apple Pay.
Square keeps its pricing low for both its credit card readers and processing fees, which makes it the best choice for small businesses. There’s no monthly fee and you don’t have to worry about variable rates from month to month. Visit Square to get a free account.