Credit Card Machines vs. Mobile Payment Solutions

When you run a business, one of the most important decisions you’ll make is how to accept payments from your customers, and with payment technology constantly evolving, it’s crucial to keep ahead of the trends. 

Two popular options are credit card machines and mobile payment solutions. While they both let you process card payments, they work differently and fit different types of businesses.

Understanding these payment tools will help you make the right decisions for your business. In this article, we’ll break down what credit card machines and mobile payment solutions are, how they compare and which might be right for your business.

Let’s dive in.

• What are credit card machines and mobile payment solutions?
• Types of credit card machines for businesses
• How do mobile payment solutions compare
• Security features and compliance for payment processing
• Key factors to consider when choosing a payment system
• Moving forward with the right payment solution
• FAQs about credit card machines and mobile payments

What are credit card machines and mobile payment solutions?

A credit card machine is a device that lets businesses accept payments from credit or debit cards. These machines typically have a keypad, a screen and a way to read cards—either by swiping, inserting a chip, or tapping.

Credit card machines connect to payment processors through phone lines, internet cables, or wireless networks. When a customer pays, the machine sends their card information to the processor, which checks with the customer’s bank and approves the payment. Then the money moves from the customer’s account to the business’s account.

Mobile payment solutions work differently. They use smartphones or tablets with special card-reading attachments and apps to process payments. Instead of a standalone machine, the business owner uses their mobile device to accept payments through the internet.

Over time, payment technology has evolved, and early credit card machines were big, clunky devices that used phone lines and printed long paper receipts. Today’s options are smaller, more portable and can do much more than just process payments.

Types of credit card machines for businesses

1. Countertop terminals

Countertop terminals are the most common type of credit card machine. They stay in one place, usually at your checkout counter, and connect to the internet through a cable or phone line.

These machines include built-in receipt printers and PIN pads so customers can enter their PIN codes. They work well for businesses with a fixed checkout area, like retail stores or restaurants with a central payment station.

Pros for businesses:

• Reliability: Wired connections mean fewer dropped transactions and consistent processing
• Familiarity: Most customers already know how to use these machines
• Durability: Built to handle hundreds of transactions daily without breaking down

2. Portable handheld devices

Portable credit card machines work wirelessly using Wi-Fi or cellular networks. These battery-powered devices can be carried around your business, making them perfect for restaurants where servers take payments at tables or businesses that need flexibility in where they process payments.

They’re slightly more expensive than countertop terminals but offer more freedom of movement. The main limitation is battery life—most need charging after a full day of use.

Pros for businesses:

• Mobility: Process payments anywhere within your business
• Customer convenience: Bring the payment process to your customers instead of making them come to a checkout
• Versatility: Accept all types of cards and payment methods on the go

3. Integrated POS options

Some credit card machines are part of a complete point-of-sale (POS) system. These systems do much more than just process payments—they also track inventory, manage sales data and generate reports.

Integrated POS systems connect your payment processing with other parts of your business. For example, when a customer buys something, the system automatically updates your inventory records. Lightspeed Retail, for example, offers an all-in-one solution with embedded payment processing, sales tracking, inventory management, marketing tools and more.

How do mobile payment solutions compare

1. Smartphone-based card readers

Smartphone card readers are small devices that connect to your phone or tablet. They let you accept credit and debit card payments using a mobile app. 

Setting up these readers is simple: download the app, create an account and connect the reader to your device (usually through Bluetooth or by plugging it in). The whole process takes just a few minutes.

Pros for businesses:

• Cost-effectiveness: Most readers cost less than traditional machines
• Portability: Fits in your pocket and works anywhere with internet access
• Simplicity: Easy to set up and use with minimal training

These readers work well for small businesses, pop-up shops, farmers market vendors and mobile service providers who need to accept payments in different locations.

2. In-app purchases and digital wallets

Digital wallets like Apple Pay, Google Pay and Samsung Pay let customers pay using their smartphones or smartwatches. Instead of pulling out a physical card, customers simply tap their device on a compatible payment terminal.

To accept these payments, your business needs a payment terminal with near-field communication (NFC) technology. Most modern credit card machines and mobile readers include this feature.

Digital wallets are becoming more popular because they’re fast and secure. When a customer pays with a digital wallet, their actual card number isn’t shared with your business—instead, a one-time code is used for that specific transaction.

3. Contactless transactions on tablets

Tablet-based POS systems combine the features of traditional credit card machines with the flexibility of mobile solutions. These systems use tablets (like iPads) with special stands and card readers to create a complete checkout station.

These systems can accept all payment types—chip cards, magnetic stripe cards and contactless payments. They’re more versatile than smartphone solutions but more portable than traditional countertop terminals.

Pros for businesses:

• Versatility: Works as both a stationary checkout and mobile payment solution
• Customer experience: Modern interface that’s intuitive for both staff and customers
• Space efficiency: Takes up less counter space than traditional registers

Many small and medium-sized businesses choose tablet-based systems because they offer a good balance of features, flexibility and professional appearance.

Security features and compliance for payment processing

1. EMV chip technology

EMV stands for Europay, Mastercard and Visa—the companies that created this security standard. EMV chips are those small metallic squares on credit and debit cards that have largely replaced magnetic stripes.

Unlike magnetic stripes, which contain unchanging card data, EMV chips create a unique code for each transaction. This makes it much harder for fraudsters to copy card information or create counterfeit cards.

• Fraud protection: Creates a unique transaction code that can’t be reused
• Liability shift: Businesses using EMV-compliant equipment are protected from certain types of fraud liability
• Global standard: Accepted worldwide, making it easier for international customers to pay

All modern credit card machines and mobile payment solutions support EMV chip cards. If your business doesn’t use EMV-compliant equipment, you could be liable for fraudulent transactions.

2. PCI DSS standards

PCI DSS (Payment Card Industry Data Security Standard) is a set of security requirements that all businesses accepting card payments must follow. These standards help protect customer card data from theft and fraud.

The requirements apply whether you process one transaction a month or thousands daily. They cover how you handle, process and store payment information, including: 

• Network security: Using firewalls and secure networks to protect payment data
• Data protection: Encrypting stored customer information and limiting access
• Regular testing: Checking systems for vulnerabilities and updating security measures

Failure to comply with PCI DSS can result in fines, increased processing fees, or even losing the ability to accept card payments.

3. Encryption and tokenization

Encryption and tokenization are two important security methods used in payment processing.

Encryption scrambles card data during transmission so it can’t be read if intercepted. It’s like sending a coded message that only the intended recipient can understand.

Tokenization replaces sensitive card information with a unique identifier (token) that has no value outside your payment system. Even if someone stole this token, they couldn’t use it to make fraudulent charges.

Key factors to consider when choosing a payment system

1. Scalability for multi-location stores

If you plan to expand your business to multiple locations, your payment system should grow with you. A system that works well for one store might become complicated when managing several locations.

Centralized payment management lets you monitor all your locations from one dashboard. You can view combined sales data or break it down by location. This makes it easier to spot trends and make business decisions.

Lightspeed’s POS and payments platform offers multi-location management that keeps all your stores connected. You can track inventory across locations and move products between stores as needed.

• Reporting capabilities: Look for systems that show both overall and location-specific data
• User management: The ability to set different access levels for staff at each location
• Inventory tracking: Systems that update inventory in real-time across all locations

2. Integration with POS or ecommerce

A payment system that connects with your POS system or online store creates a smoother workflow. When systems are integrated, information flows automatically between them, reducing manual data entry and errors.

For businesses that sell both in-store and online, integration is especially important. It helps you maintain accurate inventory counts across all sales channels and gives you a complete view of your business.

3. Support and maintenance

When your payment system stops working, you can’t collect money from customers. That’s why reliable technical support is essential.

Traditional credit card processors typically offer phone support during business hours. Mobile payment providers often provide support through in-app chat, email and online help centers.

Consider these support factors:

• Availability: Is support available when you need it, including evenings and weekends?
• Response time: How quickly can you get help if something goes wrong?
• Training resources: Are there tutorials, guides, or training sessions for you and your staff?

Regular maintenance and updates are also important. Software updates improve security and add new features, while hardware eventually needs replacement as technology advances.

Moving forward with the right payment solution

Choosing between a credit card machine and a mobile payment solution depends on your specific business needs. Consider your business type, typical transaction volume and how you interact with customers.

Traditional credit card machines work well for established businesses with fixed locations. They offer reliability and familiarity but less flexibility.

Mobile payment solutions are ideal for businesses that need portability or are just starting out. They typically have lower upfront costs but may have higher transaction fees.

For growing businesses, integrated POS systems with embedded payment processing provide the best of both worlds. They offer the reliability of traditional systems with the flexibility and features of modern technology.

Lightspeed provides payment solutions that are embedded directly within the POS and ecommerce platform. This creates a seamless system for managing sales, inventory and payments across all channels.

FAQs about credit card machines and mobile payments

What happens if my internet connection goes down during a transaction?

Most modern payment systems include offline mode capabilities that store transaction data securely until your connection returns, allowing you to continue accepting payments during internet outages.

How do I choose between a traditional credit card machine and a mobile payment solution?

Consider your business type and location—fixed businesses like retail stores often benefit from traditional machines, while businesses that move locations or process payments tableside may prefer mobile solutions.

Can I use the same credit card machine for multiple businesses?

While technically possible with some providers, using one machine for multiple businesses complicates accounting and reporting—separate machines for each business entity is generally recommended.

How long does it take to set up a new credit card machine?

Setup time ranges from minutes for mobile solutions to 1-2 business days for traditional terminals, including account activation, configuration and basic training.

Editor’s note: Nothing in this blog post should be construed as advice of any kind. Any legal, financial or tax-related content is provided for informational purposes only and is not a substitute for obtaining advice from a qualified legal or accounting professional. Where available, we’ve included primary sources. While we work hard to publish accurate content, we cannot be held responsible for any actions or omissions based on that content. Lightspeed does not undertake to complete further verifications or keep this blog post updated over time.