How important are credit cards?
I say that if you do many art shows or if you sell items for more money than customers usually carry around, you should take credit cards. The loss of only a few sales due to not taking credit cards is not worth it since it is easy to set up an account to take credit cards and the cost for entry is very low if you already have a smart phone.
Recently, numerous companies such as Squareup (The Square reader), Paypal and Amazon have come out with small credit card readers that attach to many Apple or Android smart phones or the Ipad. These credit card readers are also compatible with many Android tablets.
Not too many years ago, many artist that took credit cards, with similar capabilities to what the Square does now, used expensive stand alone machines with heavy monthly service charges even on months that no credit cards were run. These credit card machines were not financially practical for the artist or small shop keeper at outdoor events that did not sell in enough quantity to justify the cost. Most vendors at art shows are now using the small readers that work with there existing smart phones. The percentage rates to the credit companies are very competitive so even vendors that take only the occasional credit card can justify the cost since you are only charged when you use the reader.
For all of these card readers, I recommend getting at least two from your vendor of choice. If you have trouble running a customer’s card, you can try using the second reader. There is no need to loose a sale for not having a second free or low cost card reader.
If you take credit cards, be sure to place a sign such as Visa/Master Card/AMX logo on your table or wall in plain sight. You can search the internet for “credit card signs” or look on Ebay to purchase some at reasonable prices.
The Square credit card reader: Magnetic strip, embedded chip and Apple Pay
Below I describe the three different credit card readers from Square. The first one is the reader that most people are currently using that reads only reads the credit cards magnetic strip.
The second reader which is new and currently available will eventually replace the older credit card readers. This second reader will be able to read the credit cards embedded chip as well as the credit cards magnetic strip. This reader is what everyone will be using soon and it is recommended that you switch to this newer model.
The third type reader is optional and allows you to not only read credit cards with the embedded chip in them, but additionally allows you to take credit cards wirelessly using Apple Pay.
One popular credit card reader (card reader type 1), shown in photo to left, is the “Square” which is available at www.squareup.com. The Square is what I see most people use and has reasonable percentage fees with no other monthly service costs. This Square reader will read the magnetic strip on the credit card.
Once you run your charge using the Square, you will receive an email letting you know that they have received your charge. You will receive another email when they transfer the money into your bank account. I currently use the Square on a LG smart phone.
Many credit cards currently in use already have the more secure chip embedded in them, as shown in the photo to the right. My understanding is that due to a law change, all new credit cards sent out after October 2015 will be required to have the new chip in them.
The new and slightly larger Square reader (card reader type 2), shown to the right, is currently available for $29.00 at
(New Square chip card reader purchase link). This new reader has two slots that will read both the magnetic strips on older cards and also be able to read the credit cards with the chip in them.
The new Square chip reader does have a small battery in it that will need to be charged with USB charger slot found on the bottom of the reader. I believe that the reader comes with the recharging cord. You may want to charge up the reader before any major show or at least have a spare reader.
See how to use the new Square chip reader 2 in this short video.
Not to get too confusing, but Square is also coming out in Fall 2015 with a third reader (card reader type 3), shown below. This much larger reader will read Apple Pay and EMV (Europay, Master Card and Visa) which in English mean cards with chips in them. I do not think this reader has the ability to read the credit card magnetic strip, so you will have to have to keep your older Square reader for this.
See how to use the new Square chip reader 3 in this short video.
This card reader type 3 will have a $49.00 purchase cost but you will be able to get a partial or full credit of that fee if you use the device a lot over the first three months. I am not clear how this reader works yet, but they state that the device will connect to your Square app so it will probably connect wirelessly using Bluetooth to your phone or Ipad. This device also runs off of a battery.
General Square card reader information:
You probably can get away with using the current free card reader, shown at the top left, for a while since the new cards that contain the chip will also have a magnetic strip on them. If you do many charges, the better security of card readers that can read the chip, will have some advantages such as better fraud protection and not needing to scan the magnetic strip multiple times to get it to work.
Another reason to get a card reader that reads the chip is that eventually, the banks may hold the artist responsible for any credit card fraud if you accept a credit card charge by using the magnetic strip. Currently the banks usually eat the cost of fraud but eventually may say that using the magnetic strip makes you liable for any fraud since that method (magnetic strip) is the weakest security link.
Note: I received an email from Square in June 2015 informing me that one of my older Square readers (magnetic strip only reader type 1) would soon no longer work and suggested that I get a free replacement. The message stated “If you’re not sure which of your Readers is the older model, flip the Reader upside down—If the bottom of your reader nearest to the audio jack says “S4 China”, you are not required to upgrade.”. One of my readers stated “S3/Mexico”, so I will be replacing that Square reader. If you have some older Square readers, you may want to check out what version they are.
The following information was found on the Squareup web site (link here). Tax law requires that we provide account holders who process over $20,000 and 200 credit card payments per calendar year with a Form 1099-K before January 31st. We are also required to file a corresponding tax form with the IRS. Whether you reach $20,000 in payments and more than 200 payments will be determined by looking at the SSN associated with your Square Account.
The Paypal and Amazon credit card readers:
Another company that has a credit card reader for smart phones is Pay Pal with additional information at (Paypal reader link). Pay Pal does have a customer service phone number if you have any problems. I feel that there rates are also reasonable.
Paypal update: Paypal also has a new chip reader, shown to right, for credit cards with chips and Apple Pay. See information at (Product link here).
Amazon also has a credit card reader for smart phones. Amazon’s reader only works on selected phones so check if your phone or tablet is compatible before ordering. Amazon (Product link here).