What Are Card Readers and Why Are They Important?

Since last year, e-commerce sales have been increasing as businesses and organizations adopt cashless options for consumers. In light of health mandates that encourage the need to observe social distancing, emerging has helped different sectors ride out the pandemic effects and accelerated the adoption of cashless payments.

From QR codes to digital wallets, businesses have adopted new methods for processing cash transactions. Many of these emerging technologies will become a part of everyday living. It’s high time for businesses to adopt a digital-first mindset and leverage tools like card readers.

In this article, we will be looking over what card readers are and how they can help your business thrive.

What are card readers and how do they work?

Before, people thought of card readers as simple gadgets that read the contents of a memory card. Devices like laptops and tablets have card slots that allow you to insert an SD card in order to transfer files.

Today, the term applies to a wide range of products and services that capture the information contained in a variety of cards, including debit and credit cards. As a software service, a card reader uses a character recognition program to read what is printed on the card. Apart from capturing the names of cardholders, card numbers, and birthdays, the card reader can also extract data from a barcode or RFID.

Where are card readers applied?

Card readers are used in a wide range of industries and applications. The most common use of these tools is payment processing. Using mobile apps with card-reading capabilities, customers can simply scan their cards and relay their details in real-time.

Card readers not only eliminate the need to type in their credit card numbers and card validation codes manually but also fast-track the payment process. If you want to provide customers with added convenience and speed, then using a card reader will prove to be a worthy investment.

Apart from making online payments, you can also use card readers for verifying customer identities. Financial institutions such as banks and lenders can use scanners to analyze ID validity and prevent fraud.

Law enforcement institutions are also using card readers to verify identities and put a stop to ID forgery. Traffic enforcers, for instance, can use a driver license scanner to spot fake licenses using an algorithm that extracts vital information, including expiration dates, VIN, and state registration.

Card readers are also an important security feature to have. If you’re running an online store, digital transactions are vulnerable to cyberattacks. Hackers using a keylogger can inject malware that tracks customers’ keystrokes. This allows hackers to capture sensitive information and use it to hijack accounts. Card readers eliminate such risk since they allow customers to scan their cards and transfer the information safely to your business.  No such data is transferred to a third-party entity, so your customers are safe.

In addition to these, employers can use card readers as an effective tool for doing background checks. With this, verifying applicant identities and preventing fraud becomes much easier to deal with.

Why use card readers?

Now that you know how card readers work, you might be wondering if getting one is worth the expense. Card readers offer a wide range of benefits for large companies and even small businesses. As a matter of fact, adopting such technology gives you a wide range of advantages.

Contactless processing

The chief reason you will want to use a card reader in your business is a truly hands-free experience for your business and your customers. Using a sophisticated card-scanning tool, you can get around the need to exchange physical cards. Considering today’s health crisis, card readers provide a more hygienic and safer way to process transactions. As contactless technology becomes a part of daily life, using scanners would be the most expedient thing you can do at present.

Enhanced security

With card scanners, you can simply bypass the need to manually enter information that hackers are capable of capturing.  Most card-scanning software are HIPAA, GDPR, and CCPA-compliant, so you won’t have to worry about handing over customer information to a third party. Encryption can also add another layer of security, so whether you are using a card scanner for ID verification or payment collection, card scanners will help keep your business, your employees, and your customers safe.

Improve customer satisfaction

Since card readers capture cardholder information in real-time, customers can enjoy faster transaction speeds with little to no downtime. That’s because card readers can also function offline, allowing you to scan card details and process these once a connection is available. Through a reliable card-scanning service, you will be able to boost online sales and improve your reputation as well.

Prevent fraud

Fraud has cost companies millions of dollars in the long run. Whether it’s employing a fugitive or dealing with an unlicensed contractor, you need to make sure that all your transactions are transparent and legal. Using card readers, you are provided a faster and more accurate way to verify the people you encounter, you can prevent cases of identity theft and which could have a significant impact on your business’s reputation.

How can you make the most out of card-reading technology?

Considering these benefits, investing in card-scanning software would be worth the time and money you will be spending. Apart from easing up payment and verification processes, you also equip your business with a more secure way to process payments.

To maximize your use of card-scanning software, consider looking for a smart scanning solution that fits your industry. The market for green-powered AI solutions is constantly growing and you have options for identity document scanning, credit card scanning, and other services down the line. You will also need a solution that works well with mobile phone cameras, web cameras, and wearable devices such as smartwatches and smart glasses.

The future is contactless and that’s more than enough reason to invest in the latest tools. Consider investing in card readers and see how you can stay current in a digital-first environment.