The biggest difference between the two is that a full-service processor sets you up with your own merchant account, while a mobile processor sets you up as a sub-merchant under its master merchant account.
A sub-merchant account is faster to set up and has minimal application requirements; there’s usually not a contract, many don’t charge any monthly or annual fees, and the processor takes care of PCI compliance – which are all good things. But, the downside is that mobile processors have less risk tolerance – which means that if there’s something abnormal about your account, such as a sudden spike in your monthly processing volume, or a transaction that’s much larger than average or for some reason looks suspicious, the processor may freeze your funds or suspend your account. There are also some industries that mobile processors consider high risk and don’t work with, so you’ll want to read the user agreement before signing up to make sure your business type is supported.
Another difference is that some mobile credit card processors, such as PayPal and Square, allow individuals to sign up for accounts, which may be useful for solopreneurs, freelancers and very new businesses that are still getting set up and may not yet qualify for an account with a full-service processor.
Generally, mobile processing is the most cost-effective credit card processing solution for businesses that process less than $3,000 per month because, in most cases, you pay as you go for the processing services you use and there are no monthly or annual fees. It’s also a good solution for businesses that don’t yet know what their monthly processing volume will be. The tradeoff, however, is that you pay higher transaction rates that what you’d pay a full-service processor. If the processor only charges a percentage for each transaction and doesn’t tack on a flat per-transaction fee, it’s also an affordable option for businesses with low-dollar sales tickets – even those processing well over $3,000 per month.
Mobile credit card processing has minimal hardware requirements, so you can start accepting credit cards with very little upfront costs. If you already have a phone, the only processing equipment you need is a mobile credit card reader, which cost under $100 (and often $50 or less) for a model that can accept chip and contactless cards as well as mobile wallets like Apple Pay and Google Pay. With just your phone, the free mobile processing app and the card reader, you can ring up sales and accept card payments wherever you do business, whether you’re at a job site, attending a trade or truck show, or even at your brick-and-mortar location. Then, as your business grows, you can purchase peripherals like a receipt printer, cash drawer, barcode scanner and tablet stand.
Established business owners have the option of working with a full-service processor and adding mobile credit card processing to your account or working with a mobile processor. Your employees can then use mobile card readers with tablets or phones as line busters to speed up the checkout process for customers, or, accept payment tableside, if you have a restaurant.
If you decide that a mobile processor is the best fit for your business, read on to learn more about the pricing and features you should look for in a provider. Our reviews can help you identify the companies you want to learn more about, but you still want to contact the companies directly to verify that you have the pricing and terms that will apply to your specific business. This call will also allow you to feel out the quality of the companies’ customer service. Finally, before signing up for an account, you should read the user agreement or contract to make sure that the processor works with your business type and the items or services you sell aren’t prohibited.
If you prefer to work with a full-service processor, see our credit card processing review to find our best pick recommendations. Our POS systems review is another helpful resource to checkout if you plan to add this technology to your business.