Should you buy an iPad credit card reader?

Should you buy an iPad credit card reader?
Image: Jupiterimages/Photos.com/Thinkstock

About This Quiz

Swipe-and-go credit card readers are all the iPad rage. Are they for you?
Which of the following is not a popular iPad credit card processing app?
Square
Inner Fence
Card Me
Square is the market leader. Card Me is what 30-somethings hope will happen in a bar.

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After you click "charge" on an iPad credit card reader, where is the first place the data is transmitted?
the customer's credit card company
radio tower
There are many links in this transmission chain, the first of which is to a cell phone radio tower.
relay station

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What currently provides the most security risk for iPad credit card customers?
malware
Generally, as long as your iPad stays clean of unwanted downloads (malware), your customers' information stays safe.
trolls
radio jackers

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True or false: iPad credit card processing applications are generally free downloads.
TRUE
Until 2011, mobile credit card apps cost upwards of $20 to download. Now they're almost always free on the front end.
FALSE

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True or false: To accept credit card payments in any format requires the hardware of a plug-in credit card swiper.
TRUE
FALSE
This is a bit of a trick question. A credit card swiper makes handling payments much easier, but most apps still allow you to type in credit card numbers by hand.

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Generally, what is the price range you should expect to pay for a plug-in credit card swiper to accompany your iPad credit card reader app?
It's free.
Most apps will send you the hardware for free.
Under a dollar
$1 to $10

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An iPad credit card app that charges a registration fee and monthly premium for unlimited sales would be best for which of the following businesses?
a high-end art gallery
a low-end street vendor
Paying a monthly fee may allow you to save per transaction and percentage fees, making it best for a business that deals in volume -- for example, a low-end street vendor.
a psychology practice with 10 weekly clients

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An app that charges a per-transaction fee and a percentage of each sale would be best for which of the following businesses?
a high-end art gallery
a low-end street vendor
a psychology practice with 10 weekly clients
If your number of sales and total haul is low enough, you might be better off paying a per-transaction fee, rather than a monthly cost. The answer is a psychology practice with few clients.

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An app that allows vendors to buy bundles of 20 transactions for a one-time cost of $9.99 would be best for which of the following businesses?
a high-end art gallery
If you own an art gallery, where people pay more than $1,000 per purchase, you'd be better off not paying a percentage for processing. And with infrequent sales, a bundle may allow you to duck monthly fees.
a low-end street vendor
a psychology practice with 10 weekly clients

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Carnegie Mellon behavioral economist George Loewenstein said what of credit cards (compared to cash)?
It anesthetizes the pain of paying.
In a 2007 paper published in the journal Neuron, Loewenstein showed that paying with credit cards is literally less painful than paying with cash.
Cards are more secure than cash.
Both will be replaced by iPad payments.

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Which of the following is not a common feature of iPad credit card processing applications?
accepts customer's digital signature
e-mails PDF from within app
stores credit card information to ease future use
While credit card processing applications save customer data, they don't save customers' financial information.

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Which of the following is not a capability of iPad credit card payment apps?
has built-in capability to read credit card magnetic stripes
You will need a credit card "swiper" accessory, which most apps offer for free.
syncs with GPS to track sales locations
determines accept/decline before sale is finalized

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What most accurately describes the credit card reader hardware that commonly comes with iPad credit card processing apps?
a cigar-box-sized till that commonly also accepts cash
a red-light scanner like at the grocery store
a tiny swiper that plugs into the iPad's headphone jack
Here's a good example: Square comes with a quarter-sized swiper that plugs into your iPad's headphone jack.

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iPad credit card reader apps that charge a percentage of each sale commonly charge in what range?
0.01 to 0.15 percent
0.16 to 1.5 percent
1.5 to 4 percent
While payment plans vary widely, most apps that charge a percentage keep it in the 1.5 to 4 percent range.

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In January 2011, TechCrunch.com reported that mobile payments company Square was valued at what amount?
$100 million
$2 million
$200 million
With the tablet market blowing up, so too are the remora-like apps that support them -- to the tune of Square's $200 million.

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Juniper Research predicts that by 2015 the mobile payments sector will be worth how much?
$1 billion
$38 billion
$670 billion
The answer is $670 billion. That's almost triple the 2011 value.

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What best decribes a "drive-by download," which may be iPad payments' greatest risk?
your iPad's attempt to sync with un-vetted WiFi networks
an unwanted, malicious download that freerides on legit software when you click "download"
Downloads from the Internet have the potential to install unwanted malware on your iPad system.
software beamed to your iPad from other mobile devices without your knowledge

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True or false: While accepting credit card payments with your iPad requires additional hardware (or typing credit card numbers in by hand), your iPad comes equipped with the ability to pay for items.
TRUE
Near-field communication chips installed in iPad 2 (and iPhone 5) allow them to communicate with payment centers, for example at Starbucks.
FALSE

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In contrast to the 1 to 4 percent that iPad credit card processing apps charge per purchase, for merchants grossing less that $3,000 a month, what does online payment giant PayPal charge?
a flat rate $0.30 per purchase
2.9 percent plus $0.30 per purchase
4 percent plus $0.50 per purchase
The answer is 4 percent plus $0.50 per purchase. Higher sales totals are charged lower percentages.

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What security certification should you require of your iPad credit card reader app?
PCI DSS
STAP
PCI DSS stands for Payment Card Industry Data Security Standards. The remaining answer choices are acronyms taken from the Star Wars universe and include Single Troop Aerial Platform and New Republic Intelligence.
NRI

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You Got:
/20
Jupiterimages/Photos.com/Thinkstock

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