Need an affordable card reader?

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Need an affordable card reader?

The low-cost Square Reader payment card reader has finally reached the Australian market.

Credit and debit card readers aren't cheap, which can be a problem for businesses that feel the need to accept card payment but don't have the volume to justify the fixed costs.

But the Square Reader - which plugs into the headphone jack of an iOS or Android phone or tablet and works with an app to turn the device into a payment terminal - is now available in Australia for just $19. That compares with prices around $200 for readers that connect to mobile devices via Bluetooth.

So the initial cost is substantially lower, but what about ongoing fees?

Payment processing for Square Reader in Australia is provided by Cuscal, which provides services to the majority of credit unions, and operates the rediATM network. Visa, MasterCard and American Express cards are accepted.

The transaction fee is 1.9 percent, with settlement in one or two business days.

That compares with starting rates of 2.6 percent from eWAY (which additionally accepts Diners, JCB and Discover cards) and 1.77 percent from MYOB PayDirect (which accepts Visa, MasterCard and EFTPOS payments).

The difference between the ex-GST prices of Square Reader and the MYOB PayDirect Reader is $207.63, so Square remains the cheaper option until you have received about $160,000 in card payments.

But cost isn't everything: Square takes AmEx, PayDirect doesn't; PayDirect takes EFTPOS (at a flat 27c per transaction), Square doesn't.

Also, PayDirect integrates with MYOB Essentials and AccountRight (understandably), while Square integrates with Xero and QuickBooks Online.

Square Reader can be ordered online and will soon be available from Apple, Bunnings and Officeworks stores.

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