The Square credit card readermakes it easy for small business owners to accept credit cards. The reader is free, but there is a 2.75% charge per swipe. (Courtesy of Square)

Dave Greenbaum, a computer repairman in Lawrence, Kan., used to cringe when customers pulled out their credit cards.

“I knew I’d be charged anywhere between 0.5 percent and 95 percent in fees,” he said.

Now, thanks to a tiny plastic device that he plugs into his iPhone, Greenbaum knows exactly how much he will be paying for each transaction: 2.75 percent, regardless of the type of credit card being used or the number of sales he racks up every month.

The Square credit card reader, a free device that can be connected to any iPhone, iPad or Android, allows small businesses to process credit cards without bulky machineryor binding contracts.

More than 800,000 credit card readers have been distributed through Square's Web site since the product was launched a year ago by Twitter co-founer Jack Dorsey. More than $2 billion worth of transactions have been processed to date.

“A lot of small companies — restaurants, cafes, craft shops — are running their full business off of this,” Baynes said, adding that the device has a particular following among taxi drivers in Orlando.

The transactions are generally processed and deposited directly into the business owner’s bank account within 24 hours, said Katie Baynes, a public relations manager at San Francisco-based Square.

Max Brown, co-owner of Chinatown Coffee Co. in Washington, says his store’s credit card processing fees have been cut in half since he started using the Square reader five months ago.

“For a one-shop business, it’s really the best thing,” he said.

There are times, though, when the Square reader can be impractical. The device has to be plugged in — so phones or iPads can’t be used during transactions, and Greenbaum said it often takes longer to use than a traditional credit card machine.

But for now, he says the benefits far outweigh the costs for his one-man business. Receipts are emailed or text messaged directly to the customer, and he receives an itemized statement at the end of each month.

“Square is really turning the credit card processing industry on its head,” he said. “They are doing for credit cards what Apple did for computers.”