Machine for Card Payments: Your Small Business Guide

Illustration of a machine for card payments

In 2020, over half of all payments in the UK were made using cards and according to a 2022 study, 40% of Americans are likely to use a credit card for purchases. Yes, there was a pandemic, but this increase was part of a longer-standing trend that has seen cash payments decline and card payments increase. That’s why it’s crucial to accept card payments in your store, and why more and more businesses are looking for the best machine for card payments.

It can be hard to know what to look for. A machine for card payments is sometimes known as a payment terminal, a point of sale (POS), an electronic point of sale (EPOS), a credit card machine, or a Chip and PIN machine. They’re not all exactly the same, but they’re used in similar ways.

The type of card payment machine you use will make a big difference both to your customers and to your business.

Modern machines that connect to EPOS or POS systems are faster, can do more, and help support the most important areas of your business.

With that in mind, let’s look at what a machine for card payments is, how it works, some costs to be aware of, the types of credit card machines available, and which card machine is best for your small business.

What is a machine for card payments?

A machine for card payments is exactly what it says it is: a machine that accepts credit and debit card, contactless, mobile, and other types of payment at a store level. The machines send data to the payment processor when a payment is made. 


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How does a card payment machine work?

Card payment machines accept a variety of payment methods. In the UK, the Chip and PIN method is the most common, as it’s the most secure. A customer inserts their card into a machine and enters a unique personal identification number, or PIN. This system is EMV (Eurocard, Mastercard, and Visa) compliant, meaning it meets a standard of security that was enacted in 2015 and has since been widely adopted.

Tap to pay contactless payments are EMV compliant too; they’ve been around for more than a decade, but are still increasing in popularity in the US and other regions. They use NFC (near field communication) transmitters to initiate a transaction. Customers tap their credit or debit cards, or mobile phones (for Apple Pay and Google Pay) against the terminal and wait for the process to finish. 

An older method still used in some places is the magnetic stripe payment. The cardholder’s data is stored on a magnetic stripe, rather than in an embedded computer chip. The cardholder signs a receipt as proof of ownership.

The physical card doesn’t always have to be next to a card payment machine to make a payment. Some machines allow card-not-present transactions, in which you key in credit or debit card information provided by customers online or over the phone. 

Card machine costs to be aware of

There are some cost issues you need to keep in mind when you’re budgeting for a card machine.

There’s the hardware itself, the software, and any credit card processing fees.

You’ll want to compare the price to the features. Think about whether it includes NFC capabilities and whether it’s EMV compliant, for example. 

You can usually choose between buying or leasing equipment, and most software providers will allow you to purchase the hardware from a third party. If you choose this option, make sure everything is compatible, and think about functionality. How easily does the card machine integrate with the rest of your business systems?

Most basic machines cost less than £100 to buy outright. However, cheaper hardware doesn’t always make the overall system less expensive. Consider card processing fees, monthly service fees, setup fees, payment gateway fees, and compliance fees before making your decision.

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Types of credit card machines

Also consider geography.

Before you buy a credit card machine, you’ll need to think about how, where, and when you’ll want to use it.

Let’s consider some alternatives.

Traditional countertop machine for card payments

You have to use an ethernet or phone connection to process payments on a countertop machine for card payments. Most can process credit card, debit card, and digital wallet payments, as well as card-not-present transactions.

  • Pros. Countertop card readers experience minimal data breaches because they’re hard wired. (You’re also less likely to drop offline because the WiFi goes down, but this has become less likely nowadays.) Most countertop card payment machines also accept keyed-in transactions.
  • Cons. You can’t move around your store with them. In fact, you can’t move very far at all. If you have a slightly larger store, or store staff that go to your customers, you might want to look at other options.
  • Costs. The included features, the model, and the brand will all make a difference to your cost. Countertop machines are best suited to brick-and-mortar stores and can cost anywhere from £150 to £200. 

Portable card machines

Portable card machines work off Bluetooth or Wi-Fi connections. The base unit needs to be within a range of about 100m for the reader to work. Many restaurants and cafes use this type of machine for card transactions, but it’s also a good retail store option if you’d like to add mobility to your point of sale.

  • Pros. You can move around freely with your machine, as long as you keep within range of the base. With a good internet connection, you should be able to use this reader in much the same way as a countertop card processing machine.
  • Cons. They’re a little less secure than countertop machines, but good data security practices can overcome this challenge. If you need to process transactions away from a physical store, you’ll have to find a way to connect your base to the internet.
  • Costs. There isn’t always an initial cost for these machines but you’ll pay later, in the same way you might for a phone contract. Depending on how and where you buy, the price can go up to about £50 for the hardware.

Mobile card machines

Mobile card machines enable you to make transactions from almost anywhere. They work off mobile network connections, so as long as you can get a decent signal, you can accept payments. There is a charging base, but your reader doesn’t need to be near it to work.

  • Pros. Just as with the portable machine, you can not only freely move around, you can go even further. If you have a mobile signal, you can make a transaction.
  • Cons. If you can’t get a good mobile signal, however, your machines won’t work. There are also the same security issues you’ll find with portable machines. 
  • Costs. Another similarity with portable card machines is the price. Some providers will not include an initial cost but they’ll make it up by charging more for a software subscription or in transaction fees later. As with portable readers, the price of the hardware can be up to £50.

Virtual payment terminals

You don’t need a physical card reader to make a transaction with a virtual payment terminal. You can accept payments online or over the phone, using software that can be accessed with a web browser or an app.

  • Pros. It’s easy to accept card-not-present payments, and if this is the only payment type you need to accept, you can save on hardware costs.
  • Cons. You can’t accept the most commonly used payments, such as debit card or credit card transactions. There are usually higher fees associated with virtual payment terminals too, as they’re more of a security risk.
  • Costs. There’s rarely a cost for the software, but you’ll be charged a subscription fee and transaction fees.

Integrated POS (point of sale) systems

Photo of Shopify's integrated POS system

Most stores have started to migrate to an integrated POS system that communicates directly with your payment processor.

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You can accept payments directly and feed your transaction data directly to your back-end functionality, thus saving a lot of manual time and reducing the possibility of human error.

  • Pros. With an integrated POS, you can track sales, manage your inventory, and accept in-person payments, all from one place. Manual tasks such as keying in purchase amounts are greatly reduced, freeing your store staff to concentrate on making sales and building stronger customer relationships. 
  • Cons. Depending on the provider you choose, you might have limited POS integration options to add more features to your point of sale.

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  • Cost. There’s usually a subscription fee for an integrated POS, but you’re not just paying for a card reader here. You’re paying for a system that looks after the most important areas of any retail business.

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Contactless card machines

Contactless card machines aren’t really a card machine type. They’re an addition to the types already available. In the UK, you can process transactions of up to £100 with a simple tap on a countertop, portable, mobile, or integrated reader, as long as it has NFC functionality. In North America, contactless payment limits are at the discretion of card schemes and financial institutions. Your customers can pay using a contactless card, Apple Pay, or Google Pay.

  • Pros. Contactless card machines speed transactions up dramatically. No need for a signature or a PIN—your customer can literally tap and go. When this is integrated with a POS, the transaction data will be added to your system.
  • Cons. Security could be an issue. Chip and PIN technology has made card transactions much more secure but as long as a thief doesn’t spend more than £99 per transaction, they can buy a lot before a PIN is asked for.
  • Cost. The cost of a contactless card machine is the cost of whichever type of machine you opt for. Most modern machines have contactless functionality included but it’s worth making sure. UK finance says that contactless payments are used by 83% of the UK population and Visa confirmed, in the US nearly one out of every 10 card transactions at a POS is contactless. 

How to choose the best card machine for a small business

You’ll need to think about a few important factors before choosing which card machine is best for your small business. The type of business you run will make a difference. Think about how much your store staff are on the go, for example, and whether you’ll need to make a lot of card-not-present transactions. Let’s look at some of the most important considerations.

How do your customers pay?

In the UK, debit card payments became the most popular way to complete a transaction in 2017. In 2021, credit cards were the most popular payment method among US consumers, followed by debit cards, and then cash. Your customers will probably want to use their debit or credit cards but how else will they pay? Will you process a lot of card-not-present transactions? How much do your products cost? If they’re priced at less than £100, will your customers pay using contactless?

Uptime

If you can’t process payments because your card reader is constantly becoming disconnected, you’ll end up with a lot of missed payments and unsatisfied customers. A traditional card machine is less likely to cause problems, but most places in the UK have strong Wi-Fi and mobile connectivity these days. Think about where you’re working before you decide.

Integration

How easily does your card reader integrate with your payment processor? With a POS system, it’s automatic, but that’s not always the case with the other card payment machines. If you use a POS system but want to use a third-party payment provider, make sure everything is compatible.

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Longer-term pricing

You’ve already seen that the price of your machine for card payments will vary depending on a number of factors, but it’s important to consider the details. How much does it cost to run your machine? Does getting a “free” card reader tie you into longer-term contracts? Does buying a cheaper reader reduce compatibility with your payment processor? Does it also increase transaction fees?

Features

Chip and PIN is the most common way of paying by card in the UK, so you’ll need a machine that has a PIN pad. But in the US, a tap and chip reader is more common. What other features come with your card machine? Does it have a customer-facing display, for example?

Can your customers order something online, pick it up in-store, and pay for it using your integrated card reader? Once they do, can you see the reports and analytics around this transaction?

💡 PRO TIP: Offering in-store pickup as a delivery method at checkout is a great way to get more online shoppers to visit your store. To get started, enable local pickup availability in Shopify admin to show online shoppers whether a product is available for pickup at one of your stores.

Card payment machine hardware for retail

When you’re setting up your retail store, you might want additional hardware to make the process of taking payments as delightful as possible for you and your customers. Let’s look at a few of the more commonly used products.

Retail stand

Resting your tablet makes it easier to process transactions, but you’ll want a retail stand that makes it easy to pick your tablet up and place it back down at will. That way, you can bring it to your customers while searching for stock, show them your screen as you’re processing transactions, and sit in front of it yourself as you’re generating reports.

Card reader

When you’re integrating with a POS, you’ll want a card reader that performs all of the functions of a machine for card payments and that connects directly to your back office. If your card reader is mobile or portable, you can go to your customers where they are to accept payments. This makes their shopping experience quicker and easier, and it gives your store staff more opportunities to sell.

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Card machine accessories

Barcode scanners, label printers, labels, receipt printers, cash drawers, or whatever you need to make your payment process smoother and less time-consuming come under the umbrella of card machine hardware accessories. You may not need everything for your business, but at least some of these products will be useful. Choose carefully.

Time to buy a card payment machine for your store

It’s time to buy a card machine for your store. You know what a machine for card payments is, how it works, the costs to be aware of, the different types of card payment machines available, and the hardware that goes alongside them. Now you can choose the best card machine for your small business.


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