How to Choose a Card Reader for Small Business | Pick the Right Fit

Choosing a card reader for small business means matching payment types, device compatibility, and transaction costs to how you actually sell.

Whether you run a food truck, a boutique, or a home service, the right card reader depends on one thing: how you take payments. A magstripe-only model handles swipes at the lowest upfront cost. A chip and contactless reader adds EMV security and tap-to-pay. A standalone terminal works without a phone nearby. The choice changes what you pay per transaction and what your customers can use to pay, so it’s worth matching the hardware to your setup rather than grabbing the cheapest option.

Match The Reader To Your Payment Types

Different readers accept different payment methods. Magstripe readers only handle swiped cards, which are increasingly rare in the US. Chip and contactless readers handle EMV chip insertions and tap-to-pay wallets like Apple Pay and Google Pay.

Square’s current hardware lineup shows the spread. The magstripe reader costs $10 for additional units, while the first one is free for new merchants. The Square Contactless and Chip Reader sells for $59 and supports chip, contactless, Apple Pay, and Google Pay. If most of your customers tap or insert rather than swipe, a chip and contactless reader is the better fit for a typical US business.

Know Your Device And Connection Setup

Most small readers attach to a phone or tablet you already own. That means checking which operating systems the reader supports and how it connects. Square’s current product pages show iOS and Android compatibility for its reader lineup, with Bluetooth as the connection method for wireless models. A magstripe reader may rely on the headphone jack or a phone connection, so verify the connection type against your device before ordering.

If you would rather not depend on a phone at all, a standalone terminal with its own screen is the answer. Square Terminal lists at $299, and Stripe’s current pricing page shows the Reader S700 and S710 at $299 and the Reader T600 at $329. These work for countertop businesses where a dedicated device makes sense.

Pricing: Hardware Cost And Transaction Fees Are Separate

Do not assume the price on the reader is the total cost. Hardware and processing fees are separate. Square’s US contactless and chip reader page lists a 2.6% plus 15¢ per in-person payment fee on top of the $59 hardware price. Stripe’s hardware pricing similarly covers the device only, with processing fees set by your Stripe Terminal plan.

Also watch the region. A UK listing for the Square Reader 2nd generation shows pounds and VAT, which is not a US price point. Stick to the US Square hardware pages when comparing dollars.

When you are ready to compare tested models side by side, see our roundup of the best card readers for small business for hands-on picks.

Choose By Reader Type

The table below summarizes what each reader type gives you.

Stripe’s current models fit the same pattern. The Reader M2 sits at $59 for a portable chip and contactless option. The S700, S710, and T600 are standalone terminals for countertop or full-service setups. Choose based on whether you need portability or a fixed station.

One common mistake is assuming every reader takes every payment type. Magstripe-only readers will not handle chip insertions or tap payments, which can frustrate customers who expect modern payment options. Check the reader’s spec for explicit chip and contactless support before buying.

Both Square and Stripe offer setup through their respective apps and channels. Square’s hardware page notes that the first magstripe reader is free for new merchants, with additional units at $10. Stripe’s Terminal setup depends on your merchant account and chosen reader model.