Joe Kukura

There are no longer any good reasons for your business to not take credit card and debit card payments. Credit cards and debit cards are the most popular forms of payment with consumers, and customers spend more when they pay with plastic. No matter how small your business, you can easily and affordably accept credit and debit card payments anywhere that you take your mobile phone.

The smartphone revolution allows any tablet or smartphone to be instantly transformed into a working credit card reader. There are three major players in mobile credit card processing, all of whom offer a free app to process payments. Let's take a look at these three to help you decide which mobile credit card swiper is right for your business.

Accept credit card payments with Square

The most thoroughly field-tested of the instant electronic payment systems is Square, a free app that can process credit card payments on a smartphone or tablet using a small auxiliary plastic dongle. Starbucks uses Square to accept credit card payments, and it is also used by many New York City taxi drivers. Square founder Jack Dorsey, who also founded this thing you may have heard of called Twitter, claims Square is now processing $10 billion in payments annually.

Many small business owners find Square effective and affordable. The free Square dongle plugs into the earphone jack of an iPhone, Android phone, or tablet, making the device a credit card reader. Square charges 2.75 percent per swipe, or $275 monthly -- lower than the industry standard of 3.5 percent and without the dedicated phone line and expensive equipment inherent in most credit card processing systems.

There are a few disadvantages with Square. Square processes payments via Wi-Fi, so transactions will run more slowly if numerous devices are using that Wi-Fi network. Some merchants have complained that deposits are not available the next day as advertised, and occasionally they don't get those deposits for 30-60 days. The Square interface is designed in such a way that many customers forget to tip.

"Since we’ve started to use (Square), tips have started to go way, way down," coffeehouse barista Seaja Herfindahl told the Durham News. "It’s really frustrating for people like baristas, who depend on tips."

Accept credit card payments with PayPal

PayPal also offers a smartphone-friendly mobile credit card reader and undercuts Square slightly with a 2.7 percent charge on all transactions. Unlike Square, PayPal's mobile card reader can also process personal checks.

Be aware, though -- PayPal is notorious for freezing or placing holds on user accounts and funds. PayPal will freeze an account that sees unusual spikes in business -- not good if your business depends on certain "spike" business days like trade shows, product launches or single-day events. PayPal has a history of freezing accounts for non-traditional businesses, with very sensitive triggers that flag many perfectly innocent merchants. PayPal has even frozen accounts whose spike in revenue was due to charity donations.

Accept credit card payments with LevelUp

LevelUp performs the same credit card and debit card transactions, but does not utilize a plastic dongle and does not even require a smartphone. LevelUp instantly creates QR codes that can be scanned to process payments. The advantage of LevelUp for your business is that the company charges 0 percent for processing fees (though they do get you with a monthly service fee). The disadvantage is that both the seller and the buyer need to be using the LevelUp app. How often are you able to convince your customers to download third-party apps just so they can do business with you?

The mobile credit card reader field is expanding, and may be one of the bigger small business trends of 2013. Bank of America is rolling out a mobile payment service next week. Another service called PayAnywhere will soon be available in Home Depot stores nationwide, and the company is also airing an amusing television ad. If your customers want to use debit or credit cards, your business would be well-advised to give them some credit.

This article is part of the Drive Your Business Forward series. Check out for more tips and advice on how to succeed as a small business. This series is supported by Mercedes-Benz Sprinter.