A credit card machine is a type of PDQ device that allows businesses to process credit card transactions. These machines come in multiple types with different features, but they all have the same purpose: to expand payment options for businesses.
With a credit card, customers can purchase products or services on credit issued by their chosen bank. The sale amount is transferred to the business while the customer repays the bank later. This arrangement offers flexibility to customers in how they pay and allows businesses to target a wider range of customers, which results in increased revenue and profitability.
This blog will explain the process of getting a credit card machine for your business, the relevant costs and the main advantages of using them.
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How to set up a credit card machine for your business?
1. Setting up a merchant account
Every business typically has two bank accounts to manage its transactional funds. One of them is a merchant account that temporarily holds funds from card transactions for 3 – 4 days before transferring them to the business’s main bank account. This holding period allows time to account for any potential chargebacks, purchase disputes, or other issues related to the transaction.
Therefore, having a merchant account is essential for processing credit card payments. Here’s what you can do to set up your merchant account:
- First of all, you need to determine your average monthly sales volume. This will help you match your business needs to a suitable provider.
- The next step is to carefully review the contract to understand its terms and conditions.
- You can also ask for a detailed cost breakdown of the associated transaction and monthly fees.
- Before finalising your decision, compare different merchant account providers.
- Documents like the business registration number, contact information, tax ID and financial statements are usually required for the merchant account. Prepare these ahead to save time when applying.
- Fill out and submit the application form with the required documentation.
2. Choosing a credit card machine type
The type of credit card machine used by a business depends on its specific needs. Here are five different options to consider:
- Countertop credit card machine:
Countertop card machines are connected to the internet via an Ethernet cable and integrated into a POS system at a set location. They are ideal for businesses with fixed checkout areas, like retail stores and salons. Many businesses keep multiple countertop card machines, one for each checkout stop in their stores. This setup allows customers to walk up to any counter to complete their payment easily and speeds up the transaction process.
- Portable credit card machine:
Portable card machines can be carried by staff around the business premises. These wireless devices are connected to the WIFI, so the transactions can be processed at the customer’s location. They are convenient, flexible and allow table-side payments in customer-centred settings, like a restaurant.
- Mobile credit card machine:
With a compact card reader, a smartphone with Bluetooth connectivity can be used as a mobile credit card machine to take payments remotely. It offers a smart solution for businesses like food trucks and ice cream shops. With this setup, business owners can accept payments almost anywhere on a budget.
- Contactless credit card machine:
Contactless card machines allow customers to pay by simply tapping their card on the device. These machines use a wireless technology called Near Field Communication (NFC) to process transactions without needing to insert the card or enter a PIN.
- Virtual credit card machine:
A virtual card machine works by processing payments through a software interface without needing a physical credit card. You manually enter the payment information of your customers into the system to complete the transaction. A virtual credit card machine can be integrated into a business’s website, which makes it a secure option for online businesses and digital service providers.
| Card machine type | Functionality |
|---|---|
|
Countertop |
|
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Mobile |
|
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Contactless |
Accepts payments through Near Field Communication. |
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Portable |
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Virtual |
|
3. Selecting a payment processor
The third step is selecting a payment processor. The payment processor acts as an intermediary between your business, the customer’s bank and your merchant account. It handles the authorisation and settlement of the credit card payments.
Keep in mind the following considerations when choosing a good payment processor:
- Compare the fees of different payment processors and consider their impact on your profit margins.
- Choose the one that offers quick processing times, particularly if your business relies on steady cash flow.
- Ensure that the processor you select works seamlessly with your chosen credit card terminal/machine.
- A good payment processor must be PCI-compliant, and it should offer security features like tokenisation and fraud detection.
4. Integrating it with your point-of-sale terminal/system
If you have a physical business and rely on face-to-face card payments, you need to see if your POS terminal is compatible with your payment processor’s software. The integration is crucial for streamlining transactions and managing sales data.
Install any necessary software or updates provided by your POS or payment processor. And follow the configuration instructions such as selecting the correct payment methods, defining transaction limits and printing receipts.
5. Testing the systems and training your staff
The last step in getting a credit card machine for your business is testing and training. Conduct comprehensive tests by processing different types of transactions, credit, debit, contactless and refunds, to identify and fix any issues before going live.
Once the system is verified, focus on training your staff.
Card machine costs
| Costs | Details |
|---|---|
|
Purchase/Rental Fee |
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Merchant Service Charges |
0.2% - 0.3% of the transaction amount |
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Chargeback Fees |
Amount varies by provider |
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Transaction Fees |
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Setup Fees |
£50–£100 (often waived by UK providers) |
The cost of using a card machine as a small business is quite a critical point. It depends on variable factors; however, here’s a breakdown of the general costs associated with credit card machines.
- Product purchase or rental fee: If you’re buying a card machine, expect to pay anything between £20 and £250 + VAT. If you’re using a rented machine (many providers have this option), you have to pay between £10 and £25.
- Merchant service charges: These are the fees the bank charges for accepting credit card transactions. This is typically 0.2% to 0.3%.
- Chargeback fees: These are the fees when a customer disputes a transaction.
- Transaction fee: This is the percentage fee for each transaction that payment processors charge. It can range from 1.5% to 3.5% plus a fixed fee, but it depends on the provider.
- Setup fees: Some providers take a setup fee as well. It can range from £50 to £100, although many modern card machine providers in the UK waive this.
Advantages of credit card machines for businesses
Getting a credit card machine for your business comes with multiple benefits. After all, there’s a reason why many businesses around you are opting for them.
- Increased sales opportunities: Accepting credit card payments can boost your sales by providing customers with more payment options. Remember, your customers will not have hard cash with them at all times.
- Enhanced customer convenience: Credit card machines offer a seamless payment experience for customers. This reduces the hassle of handling cash and the risk of losing it. This convenience leads to increased customer satisfaction and repeat business.
- Detailed transaction records: Credit card machines generate detailed records of transactions, which can be useful for tracking sales, managing inventory and analysing business performance.
- Competitive advantage: Accepting credit cards shows that your business is modern and customer-friendly. This gives you a competitive edge over your competitors who may not offer this payment option.
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FAQs
Follow the process of getting a credit card machine mentioned below:
- Set up a merchant account.
- Choose a credit card machine.
- Select a payment processor.
- Integrate it with your terminal.
- Test the system.
Yes, you can have a card machine without a traditional merchant account, thanks to payment service providers like PayPal. Simply sign up on the platform, choose the plan, integrate it with your system and start accepting card payments.
Yes, you have to pay regular charges for the use of credit card machines. Whether you opt for a bought or rented card machine, there are costs such as transaction fees, monthly fees and merchant service charges.
