Tech Lab

Apps let your phone be a credit card terminal

Get Adobe Flash player
By Hiawatha Bray
Globe Staff / January 27, 2011

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

If any of you would like to contribute to the Bray family college fund, I now accept Visa cards.

And so can you. A couple of new products could democratize the credit card industry, by enabling pretty much anyone with a smartphone to accept plastic. I’ve been experimenting with these new devices — Square and PayAnywhere — and I’m happy to report that not a lot of tinkering was required. With either of them you can quickly begin collecting credit card payments from friends and neighbors — or more likely, from clients and customers.

Millions of Americans run small businesses, full or part time. Millions more sell items at flea markets and garage sales. But many shy away from taking credit cards because of the complexity and expense of setting up merchant accounts and obtaining the card-swiping equipment.

Well, that’s over now.

To get started with Square, fill out an application at The process could scarcely be easier. You supply your checking account number and the routing number of your bank, just as you do when signing up for PayPal, eBay Inc.’s popular Internet payment service.

Completing the setup takes a couple of days. Square must first confirm your identity the same way PayPal does — by making two small deposits into your checking account. Go to your bank’s website, write down the deposit amounts, then type them in at the Square website to confirm your account.

Now you’re ready to collect some cash. As payments start rolling in, Square will transfer the money to your bank account, generally within two days.

Signing up for PayAnywhere at is a lot faster, because the company contacts a credit-reporting agency to find out about you. The process takes minutes. But without a solid credit score, you could be turned down.

Now you need the right app for your smartphone.

Square software is available for free, and runs on Apple Inc.’s iPhone, iPad, and iPod Touch, as well as on most phones running Google Inc.’s Android operating system.

PayAnywhere, also free, works only with Apple products for now, but versions for Android and BlackBerry phones are on the way.

And how about a device that lets you swipe credit cards, just like they do downtown?

Square will send you one for free, an appropriately cube-shaped device that plugs into the headphone jack.

PayAnywhere offers a black plastic cradle that wraps around an iPhone; it costs $19.95. You can also type in credit card numbers. But having a credit card swiper is faster and easier and just looks cool.

Install the apps and you’re ready for business. If you’re selling an object, you can photograph it and add the image to your invoice. The programs also let you create preset inventories, with prices and photos of items you regularly sell.

Using the touchscreen, you peck in your items and prices, total them up, and then swipe the customer’s credit card. Approval generally takes less than 10 seconds. Both services let you accept payments through Visa, MasterCard, and Discover, but not American Express, although both companies plan to support Amex cards eventually.

Square and PayAnywhere make their profit by taking a little of yours.

Square charges 2.75 percent of the value of the transaction, plus 15 cents, while PayAnywhere charges 2.69 percent plus 19 cents.

For a $100 sale, you would collect $97.10 with Square or $97.12 with PayAnywhere.

The fees go up significantly if you enter the credit card numbers by hand, because there is an increased risk of fraud.

On the other hand, neither company charges you a dime until you actually use the service. There are no monthly fees, so it’s worth your while to sign up, even if you use the service only once or twice a year.

Once the card is accepted, the phone’s touchscreen turns into a signature pad. Have your customer scrawl his name with his finger, and you’re done.

You can have a receipt e-mailed to the buyer, and you get an invoice with a picture of the sold item.

Both apps connect to the phone’s GPS chip and generate a map to show where the deal was done, an excellent feature for plumbers, snowplow operators, and other mobile business folk.

I get around quite a bit myself, and while I don’t really expect any of you to hand over your Visa cards, I’ll be ready if you do.

Hiawatha Bray can be reached at