Business

Ask Matt ... about handheld credit card readers

Server Kelley Henry uses a handheld credit card reader at Arabella. [MATT MATTESON/Hendersonville Lightning]

By Matt Matteson, Published: December 8, 2022

Q. Everywhere I do business in town I see new credit card readers? Where is all this going?

   I found one of the newest credit card readers at Appalachian Coffee Company. It’s made by Clover and has three separate units: a touch screen for taking orders, a customer display screen that takes credit cards (swipe, chip or tap) with a signature pad, and a receipt printer. “The system we had before was slow but this is fast,” said manager Amanda Rodrigues. “It’s self-guiding and the customers love it.” The shopper’s screen shows the whole bill plus a tip option.   

   One of the more popular card readers is an Apple product called the Square. It’s popular with street fair vendors because it accepts chip credit cards and needs no connection to the merchant’s computer. Other models can take a customer’s money with a swipe, tap debit card, cell phone app and even from an Apple watch. The system gives the vendor a computer report of sales and even tips.

   Bernardo Garcia uses a smaller version of Square where he cuts hair at the Druid Hills Barber Shop. His reader plugs nicely into his cell phone but he can only “swipe” credit cards. Like many card readers his device can post payments directly to his bank.

   Hand-held devices have been popular in Europe for years but have finally made it here. Clover makes a touch screen reader model that weighs about a pound that is used by Arabella Restaurant on Main Street. It does everything — swipe, chip, and tap, even prints. “It’s fantastic,” said server Kelley Henry. “We don’t have to wait for a computer screen and our customers like seeing the entire transaction at their table.” Restaurants with brick walls however may find it hard to get a wi-fi signal.

   Breweries have a new kid on the block named Arryved (pronounced “arrived”). This combination credit card reader and inventory system was founded in Colorado by a couple of self-described craft beer geeks. Evan Golliher, co-owner of Dry Falls Brewing Company, uses Arryved. “Almost everyone runs tabs,” said Golliher, who often has 27 beers on tap. The system allows the bartender to easily keep track of customers by name and orders. “Our regulars even start tabs from their cell phones before they arrive and get on the screen,” said Golliher, who runs Dry Falls with his dad, Jeff.

   To learn more about card readers, I spoke with Marty Reed, a merchant adviser with Capital Bankcard-Merchant Services Asheville. Reed’s company sells or leases card readers. “Many businesses with card readers that are eight or nine years old are switching to new systems,” said Reed. “When covid hit, cash disappeared. The younger set is less likely to use a bank check," said Reed. "They have a debit card and sometimes that's all they need."

   Anyone doing research on credit card readers can’t help running into the term “swipe fee,” a broad term for what the credit card company charges vendors when the customer uses plastic instead of cash. Swipe fees include interchange fees, payment processor fees and assessment fees. Each may differ in amount depending on the type of business or credit card used.  Every time you swipe, the business (store, gas station, eatery, etc.) pays, and most often it’s Visa or MasterCard that gets paid. For a small business owner with a small profit margin, a 2% swipe fee can take out a big chunk, often the third largest expense after payroll and rent. “The four big credit card companies, Visa, MasterCard, American Express and Discover, are taking a big piece of the merchant's pie,” said Reed. “They don't really care how big or small your business is. It's all about the fees."

   Most credit card companies dangle rewards such as “cash back” or “travel credits” to attract customers. Rewards differ among types of purchases but in the end it’s the business owner who ends up paying the most. So what are businesses doing to offset these fees? Some are giving “cash discounts” or in reality they are charging the customer a fee to offset their own fees. My auto repair guy tacks on an extra 3% if you don’t pay cash. The other day one of his customers walked in with a wad of cash to cover a hefty repair bill. He probably saved $60 just by going to the bank for the money. Merchants are not allowed to charge more than 4% of each transaction as a processing fee. I found a downtown gift shop that charges 3.5%.  A smart consumer will look closely at each receipt.

   Is there any relief to swipe fees? A bipartisan bill was introduced in the Senate in September that would force card companies like Visa and Mastercard to lower swipe fees by encouraging competition. Of course, the banks and credit card companies are fighting it. If the bill passes, the big unknown is will the credit card guys cut back on those tempting rewards? Maybe, but in the end the consumer and the small business person seldom end up on top.

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Send questions to askmattm@gmail.com.