Do You Trust that Mobile Card Reader?

Simon Zhen

By  Updated on Wed Nov 28, 2012

Simon Zhen is an analyst, staff writer and columnist for MyBankTracker.com. His columns draw focus to all aspects of personal finance and to bank rates, products, and services. More Columns »

Do You Trust that Mobile Card Reader?

PayPalCanada / YouTube source

If you’ve ever shopped at an Apple store, you may have noticed that employees trot around with a mobile gizmo that can accept customers’ credit cards — no need to wait in line for the checkout counter. Now, imagine that sort of gizmo in the hands of just about anyone who wanted to sell something. Would you hand over your credit card to these sellers?

Currently, there aren’t many people pulling out card readers in unexpected scenarios — such as a Craigslist sale. But that may change soon.  These readers aren’t just at the Apple store or your local coffee shop. Soon they’ll be all over the place. So you’ll need to start questioning the trustworthiness of such payment systems when you encounter them.

The readers, also called payment dongles, have a slit for card swipes and they usually plug into the headphone jack of mobile devices. After swiping, the customer signs for the transaction on the mobile device’s touchscreen and an email receipt can be sent to the customer.

Companies such as Square, PayPal, Intuit, PayAnywhere and Bank of America have already deployed their mobile card readers to the market. Groupon and Amazon are some other well-known names that plan to do the same.

With the growing popularity of these mobile card readers, it’s inevitable that you’ll run into an increasing number of merchant who want to swipe your credit card on their mobile devices.

Sure, you’ll feel much safer using a mobile payment system at a major retailer like Apple, where I’ve made a few purchases without visiting the checkout registers. Even then, I leave the store thinking, “Did I just swipe my credit card on a device that wasn’t a clunky PIN-pad payment terminal?” That unfamiliarity brings forth a feeling of doubt and insecurity.

Outside of a trusted establishment, it’s not surprising to be skeptical about swiping your card on a mobile card reader. Someone who hasn’t been up to date on financial innovations can easily mistake a payment dongle for a card-skimmer.

But, if I were to come across someone who wanted to receive payment through one of these card readers, I wouldn’t mind swiping my card. After all, I know more about these payment innovations than the average consumer and, therefore, I am more likely to trust those who use them.

On the other hand, it’s not easy to keep track of all the dongles in creation.

Here’s some consolation: to accept payments via these card readers, merchants have to provide personal information, bank account information and tax identification. So they’re not exactly being used by people who can disappear off the grid.

However, if I ever do come across a Craigslist seller who used a mobile card reader, I’d watch him open up the linked mobile application that is used to process the transaction — for the peace of mind that there is nothing shady going on.

And, just to get a perspective of a seller who uses such a mobile-payment system, I ordered PayPal Here, PayPal’s mobile card reader — we’ll see if anyone trusts me enough to swipe their card on my card reader.

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