Like HowStuffWorks on Facebook!

How to Use an iPad as a Credit Card Reader

        Money | Online Banking

Perhaps you've already used your iPad as a barcode scanner -- for example, to read grocery codes to find coupons and better deals. Well, forget about a built-in, point-and-click feature for accepting credit cards. Sure, you can type in a customer's credit card number by hand. But to accept cards efficiently with your iPad, you need hardware as well as software.

Fortunately, generally both the hardware and the app are free. Companies like Square, Inner Fence, AppNinjas, Pay Anywhere, Intuit GoPayment and Swipe It offer free app downloads and will then send you the hardware in the mail -- typically a small swiper that plugs into your iPad's headphone jack and reads a credit card's magnetic stripe. To make a sale, you open the app -- a simple screen that mimics a traditional cash register (with bonus features that you can experiment with once you're ready). Then you enter the total amount of the sale, swipe the card through the attached hardware, and the customer signs directly on the touch screen.

Most apps also do double duty with your iPhone, meaning that as long as a customer is comfortable signing his or her name in the equivalent of an 8-point font, you can even further miniaturize the sales experience.

But there's a reason the hardware is free. Square charges $0.15 per transaction plus 2.75 percent of the purchase for a swiped card (3.15 percent if you type in the credit card number). Swipe It charges a $15 set-up fee, $20 per month and $0.15 per transaction. Other apps require things like merchant accounts that sync with third-party verification sites like These third-party sites may provide an app's security and functionality, meaning that the app itself is more a slick interface than a merchant account.

Do you plan to use the app one time to sell hundreds of Italian ices at a Fourth of July parade? Are you a psychologist who will you use it every workday to bill clients? Depending on sale volume and average sale price, a little nifty math should show you which app is most cost effective for your situation.

When picking an app, check for the following features:

  • Mapped sales tracking: Will it sync with the iPad's GPS to provide reports of sales locations?
  • Digital signatures: Almost all apps allow customers to sign the iPad's touchscreen.
  • E-mail receipts: E-mailing PDFs from within the app allows easy receipts.
  • Returns: Does the app manage full and partial returns?
  • Customer tracking: Does this app keep track of your top customers?

These features sound great, but is your customer's credit card info safe when he or she uses this reader? We'll investigate that on the next page.