How to accept payments on your phone: A quick-start guide for businesses


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  1. Introduction
  2. Can you accept credit card payments using a phone?
  3. Which types of businesses need to accept payments on a phone?
  4. How much does it cost to accept payments using a phone?
  5. Benefits of accepting payments with a phone
  6. How to accept customer payments on a phone
    1. In-person payment methods using phones
    2. Remote payment methods using phones

Mobile payments are here to stay. Globally, an estimated 1.18 billion people used contactless mobile payments in 2020, an increase of 22% from the previous year. Experts project that there will be around 1.5 billion contactless mobile-payment users globally by 2025, comprising nearly half of all smartphone users.

This shift is creating more opportunities for businesses to engage with customers and adapt to their transaction preferences. Professionals across various sectors – including independent businesses, freelance consultants, fitness coaches and home service providers – are turning to mobile payments to provide an easier, more convenient transaction experience for customers. And for platform businesses enabling in-person payments at scale, accepting mobile payments can yield exponential benefits for their bottom line by improving operational efficiency.

Understanding how to accept payments on your phone – and getting started straight away – is important to stay competitive in today’s fast-paced, digital-first environment. From using hardware such as Stripe Reader to digital methods such as Payment Links and tap to pay, businesses have multiple options for enabling mobile transactions. Here’s a short guide to help you assess your options and get started.

What's in this article?

  • Can you accept credit card payments using a phone?
  • Which types of businesses need to accept payments on a phone?
  • How much does it cost to accept payments using a phone?
  • Benefits of accepting payments with a phone
  • How to accept customer payments on a phone

Can you accept credit card payments using a phone?

Yes, you can accept credit card payments using a phone. Mobile payment services, such as Stripe, offer businesses this capability. Typically, these platforms have a versatile app that handles the transaction process and helps with additional tasks such as issuing customer receipts and tracking sales.

An important part of this system is the card reader, which pairs with your phone and allows you to accept transactions. A card reader can also work with or be a component of a physical point-of-sale (POS) terminal. This reader gives you the flexibility to process payments in different ways: you can swipe the card, insert it, or tap it (if the payment method is equipped to make contactless payments). When you’re not using a physical card reader attached to your phone, many of these apps can make use of your phone’s NFC technology, enabling you to accept contactless payments from cards and digital wallets.

Which types of businesses need to accept payments on a phone?

Accepting payments on a phone offers flexibility and mobility for a wide range of businesses and professionals. Here are several common use cases in which mobile payments offer notable advantages:

  • Pop-up shops and market vendors have a particularly compelling case for embracing mobile solutions for in-person payments. These businesses often operate in temporary or unconventional locations, such as outdoor markets and event spaces, where it might be impractical to use traditional payment processing equipment. Accepting payments on a phone allows these businesses to process transactions wherever they operate.
  • Food vans/trailers and street vendors are another group that can thrive with mobile payments. Given their small physical spaces and mobile locations, it doesn’t make sense for these businesses to use bulky cash registers, POS systems or traditional card readers. A mobile payment system simplifies the payment process and enables these businesses to accept payments from cards or digital wallets in any location.
  • Consultants and freelancers often work remotely or meet clients at various locations, making traditional payment methods less convenient. The ability to accept payments on a phone empowers these individuals to take control of their billing and receive payments instantly for their services, without relying on invoicing and bank transfers.
  • Home service providers – such as plumbers, electricians and personal trainers – perform their services at the homes of clients or other offsite locations. Accepting payments on a phone allows home service providers to complete transactions swiftly, reducing the time spent on billing.
  • Transportation services, such as ride-hailing apps and private taxis, can create a simple cashless experience for both the driver and passenger by integrating phone-based payments into their systems. This allows them to keep pace with customer preference for contactless payments.

How much does it cost to accept payments using a phone?

The cost of accepting payments using a phone can vary widely based on the provider that you choose, the volume of transactions that you process and the types of transactions (in person, online or over the phone). Here are some typical costs associated with popular mobile payment providers:

  • Setup fees
    Many mobile payment providers do not charge an upfront fee for setting up your account or providing a card reader that connects to your phone. But some providers offer more advanced equipment for an additional cost.

  • Transaction fees
    Transaction fees are based on a percentage of each sale. Stripe charges 2.9% + 30¢ per successful card charge for online transactions, while in-person payments conducted with Stripe Terminal are subject to rates of 2.7% + 5¢ per transaction.

  • Card-not-present (CNP) transaction fees
    Card-not-present transactions, also known as "keyed-in transactions", are completed remotely without processing a physical card via a card reader or terminal. If you need to manually type in a card number instead of swiping, inserting or using a contactless payment method, the fee is typically higher due to increased fraud risk. As of 10 November 2022, Stripe’s fees on cards entered manually in the Stripe Dashboard increased by 0.5% – from 2.9% + 30¢ to 3.4% + 30¢ – for US-based businesses on standard pricing plans.

  • Monthly fees
    While many providers charge per transaction, some use a monthly fee model. This could cost US$20–US$100 or more per month. Providers that charge a monthly fee usually offer additional features, such as advanced analytics, inventory management and customer loyalty programmes. Stripe doesn’t charge a monthly fee.

  • Chargeback fees
    If a customer disputes a charge and it results in a chargeback, the provider may charge the business a fee – usually around US$15–US$25 per incident.

  • Fees for additional services
    If you opt for add-ons, such as payroll services, e-commerce integration, appointment scheduling or subscription management, you may incur additional costs.

Each provider’s pricing structure is different, and fees can change. Make sure that you review the pricing details extensively before choosing a provider. And while negotiating rates with mobile payment providers can be challenging, it’s not impossible. In particular, high-volume businesses might have some room for negotiation, depending on the provider.

Benefits of accepting payments with a phone

Accepting payments with a phone offers numerous advantages for businesses that want to simplify transactions and create flexible payment setups. Here are some of the reasons why accepting mobile payments can be beneficial:

  • Location independence
    Mobile payment systems allow businesses to accept payments at any time and anywhere. This flexibility is particularly valuable for businesses without a fixed location, such as street vendors, freelancers and home service providers.

  • Improved cash flow
    Payments processed through mobile devices are typically settled quickly, sometimes within one working day. This can improve a business’s cash flow – especially compared to traditional methods such as paper cheques – which can take days to clear.

  • Better customer experience
    Many customers appreciate the ease of paying with a card or digital wallet instead of cash. Offering a variety of payment methods, including mobile payments, can cultivate the kind of payment experience that customers want – and lead to repeat business.

  • Increased efficiency
    By integrating with a business’s other systems and infrastructure, mobile payment systems can streamline operations. They can also automatically update inventory and sales records, reducing manual data entry and the potential for errors.

  • Security
    While no system is immune from security threats, mobile payment providers typically offer robust security measures to protect card information, including encryption and tokenisation.

  • Reduced hardware costs
    Mobile payment systems often require less expensive hardware than traditional POS systems. Some providers even offer free card readers to new customers.

  • Contactless transactions
    Accepting payments on your phone also means being able to accept contactless NFC payments using enabled cards and digital wallets. Software such as Stripe’s Tap to Pay on iPhone allows businesses to use just their phone – with no additional hardware – to accept and process customer payments in person.

  • Data collection and analytics
    Many mobile payment systems offer built-in analytics. Businesses can use this data to track sales trends, identify bestselling products and better understand their customers to inform business strategy.

Incorporating mobile payments can offer many advantages for businesses and customers. However, businesses should evaluate their specific needs, customer preferences and the potential return on investment when choosing a payment system.

How to accept customer payments on a phone

Accepting customer payments on a phone can happen in several ways. Below we explain how to accept mobile payments from customers, broken down into two payment categories: in-person and remote.

In-person payment methods using phones

Stripe Reader

Stripe Reader is Stripe’s signature card reader, and you can directly attach it to your phone. It allows you to accept card payments by swiping a magnetic stripe, inserting a chip card or tapping a card or device for contactless payments. Here's how it works:

  1. Order Stripe Reader from the Stripe website.
  2. Once you have received the reader, connect it to your phone via Bluetooth.
  3. Open the Stripe app and follow the instructions to set up your reader.
  4. When a customer is ready to pay, enter the payment amount into the app and then swipe, insert or tap their card on the reader.
  5. The payment will be processed through Stripe, and the funds will typically be deposited into your bank account within a couple of working days.

To find out more about how to get started with Stripe Reader to enable in-person payments on your phone, go here.

Tap to Pay on iPhone

Stripe’s Tap to Pay on iPhone allows businesses to accept contactless payments directly on their iPhones, without any additional hardware. Here’s how to use it:

  1. Ensure that your device is compatible with Apple’s Tap to Pay feature.
  2. Customers can pay by holding their card or Apple Pay-enabled device near the top of your iPhone.
  3. Tap to Pay on iPhone will automatically process the payment.

To find out more about Tap to Pay on iPhone with Stripe, go here.

Remote payment methods using phones

Payment Links is a convenient option for businesses that want to accept payments remotely. It allows businesses to create a full payment page in a few minutes, without any coding. Businesses can send the payment link directly to customers and complete transactions with just a few clicks. Here’s how the process works:

  1. From your Stripe Dashboard, you can create a payment link for a specific product or service.
  2. You’ll receive a URL that you can send to your customers via SMS or email.
  3. Customers click on the link and pay directly from their phone or other device. They can enter their card details or use a digital wallet, such as Apple Pay or Google Pay.

To find out more about Stripe’s Payment Links, go here.

Mobile websites or apps

Customers can also use their phone – or yours, if you’re at the same location – to pay directly on your mobile-optimised website or through your business’s app. Below is a brief overview of the steps involved:

  1. Ensure that your website or app is set up to accept mobile payments. If you work with Stripe to accept payments online, you’re already equipped with what you need. If you’re just starting, Stripe provides easy-to-use APIs and SDKs that your developers can use to integrate Stripe’s payment processing capabilities into your website or app.
  2. Customers select their desired products or services and add them to their basket, and then they proceed to checkout.
  3. At checkout, customers can enter their card details or select a digital wallet option to complete their purchase.

Each of these methods has its own set of advantages and is suitable for different business models and customer preferences. Consider your specific needs when deciding which methods will work best for you. For many businesses, satisfying every use case, sales channel and audience segment requires implementing a set of payment solutions that work together to create a multifunctional payment system.

Whether you want to enable payments on your phone to simplify your customer transactions or add mobile payment capabilities as part of a comprehensive global payment approach, Stripe’s suite of customisable payment solutions is a good place to start. To begin crafting the ideal approach based on your business’s current and future needs, get in touch here.

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