Mobile payments (mobile in general, really) are quite popular these days. Companies like Square started the mobile payment trend, and many other companies are quickly following suit. The latest mobile payment app to hit the market is the Card.io app for iOS. This mobile payment app was designed (like Square) for small business owners. Unlike Square (and other competitors), Card.io works in Canada as well as in the United States.

Since Card.io is an app and not any kind of device, this mobile payment option doesn’t come with any kind of contraption that users must affix to an iOS device. Instead, Card.io simply runs as an app. While the premise behind Card.io seems like a great one (details below), there are some potential problems with this app that might turn small business owners (and their clients) away.

How Card.io Works

Once downloaded, Card.io works by scanning credit cards. The idea is to hold an iOS device up to a card and allow Card.io to scan the card numbers. Once those numbers have been scanned, a card will be processed and payments can proceed. Card.io charges 3.5 percent per transaction plus a $.30 surcharge. Now, you might be thinking: “yeah, but Square is free to use,” and you’d be right. It’s also important to note that Card.io comes with a $999 ceiling on each transaction, and this might spell trouble for retailers who are selling pricey items.

The high transaction fee and $999 transaction cap are just two of the problems with this mobile payment option. Another glaring issue is the fact that consumers must allow a business owner to snap a photo (essentially) of a card in order to process payment. For many consumers, a retailer taking a photo of a credit card raises a red flag – after all, isn’t this precisely the kind of behavior that consumers have been warned against time and again? On the flip side, Card.io promises to be a secure app.

Functionality

The Card.io app downloads easily enough, the app itself is free, and scanning a card is simple to do. The only drawback is that some cards aren’t easily recognized by the app. Seemingly, cards that are faded or contain holograms or other photos aren’t detected by Card.io’s scanner. This might pose a problem for consumers who attempt to buy an item using an older (or highly designed) card. In turn, retailers who aren’t able to process a consumer payment will be seen in a negative light.

On the positive side of things (yes, there is a positive here!), Card.io is offered in countries outside of the U.S. This is a big deal, since Card.io competitors (such as Square) have yet to tap other markets. The question is: will retailers in any country want to pay Card.io fees, abide by limits, and risk not being able to take a consumer’s faded card? Only time will tell how small business owners respond to Card.io, but many retailers are bound to give this app a shot.