In just three years, the mobile card reader has become the second most used method for accepting payments via card-present transactions among small- to medium-sized U.S. businesses, according to a survey from Market Strategies International.
Here are the key data points:
- Among small- to medium-sized businesses, 48% use a stand-alone swipe terminal to accept card payments.
- Mobile card readers — like Square's reader — are not far behind at 40% penetration.
- Only 14% of businesses surveyed said they accepted cards at an integrated point-of-sale where the card reader is built into the cash register.
- Of the businesses surveyed, 17% said they only accepted credit cards online.
Mobile card readers are small devices that can be plugged into mobile phones or tablets and allow merchants to swipe credit cards. They've caught on incredibly well in the U.S. since Square's first mobile card reader was trialed in December 2009.
Back in October, we looked at a similar survey from BIA/Kelsey that found that 40% of small- to medium-sized businesses were already using mobile card readers. It also found that 16% of the businesses surveyed said they planned to adopt a mobile card reader in the next year.
At face value it's strange that the new data shows no growth in nearly five months. One explanation might have to do with the businesses surveyed. Both surveys were conducted online, but the Market Strategies International survey looked at businesses with 1-499 employees, while BIA/Kelsey's survey involved businesses with 1-99 employees.
A big part of why mobile card readers are attractive to very small businesses like restaurants is that they are inexpensive, and sometimes even free. So, a business that wouldn't ordinarily accept cards because of the price of a payments terminal might choose to adopt mobile card readers for card transactions instead; this segment is likely the biggest contributor to mobile card reader adoption. Among larger small businesses, like those surveyed by Market Strategies, mobile card readers are less attractive because these businesses may already have existing payments terminals.
We believe that given that adoption of mobile card readers has reached 40% among businesses with up to 499 employees, that percentage is likely significantly higher among businesses with 99 employees or fewer. Regardless of which survey we look at, adoption above 40% is certainly impressive — we're talking about an industry that has seen a dramatic shift in mobile card reader usage in just three years.
Click here to download the charts and data in Excel.
