Thinking of expanding the payment options for your business? We hear you loud and clear. Embracing credit card machines is the way forward. It offers convenience to your customers while they are paying, and that results in more shopping, more profits and more revenue. Isn’t that exactly what you need?
But how to get a credit card machine for your business? And is it really worth it? Let’s get to the answers right away.
Statistics proving the importance of credit card machines
- According to Finder, there were 58.5 million credit cards in circulation as of January 2024 in the UK.
- Almost 11.6 million credit card transactions happen per day in the UK.
- 68% of UK adults own at least one credit card.
- According to Statista, credit card usage at the POS increased from 15% in 2017 to 28% in 2023. In contrast, cash usage decreased from 22% to 10% in the same period.
See the importance of having a credit card machine at your point of sale (POS) terminal? Whether you’re running a small business of pastry or running a large retail store of shoes, having a card machine is almost a necessity in this age. Let’s now look at how you can get started with the process.
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Process of setting up a credit card machine for your business
1. Setting up a merchant account
The first step in setting up a credit card machine for your business is to establish a merchant account. A merchant account is a type of bank account that allows your business to accept card payments. It keeps the funds temporarily stored before transferring them to your main business account.
You have to choose a merchant service provider for it. Consider the following instructions:
- Reputation: Choose a provider with a solid reputation and a track record of reliable services. This helps to minimise the risk of technical issues.
- Fees: Carefully review the fees linked with the merchant account, including transaction fees and monthly fees.
- Contract terms: Understand the contract terms, including the length of the agreement and any early termination fees. Some providers offer flexible month-to-month contracts, while others might require a long-term commitment.
- Customer service: Ensure the merchant service provider offers strong customer support, especially if you come across any issues with payment processing. Your customers don’t want to see their payments decline when they have sufficient funds in their accounts.
You will need details like tax IDs, licenses, financial statements (balance sheet, income statement, etc.), the company’s name and contact information to be registered for the merchant account.
2. Choosing a credit card terminal/machine
The type of credit card machine you use for card payments depends on your business’s specific needs. You can select from 5 different options.
- Countertop terminal:
These are stationary devices that are generally connected to the internet. They are designed for businesses with a fixed location like restaurants. They offer the advantage of speed and security, making them perfect for brick-and-mortar businesses.
- Mobile terminal:
Mobile terminal is a portable device that connects via WiFi, Bluetooth or cellular data. It allows for on-the-go payment processing and is best suited for businesses like food trucks and market vendors. They offer the flexibility to accept payments almost anywhere.
- Contactless terminal:
Contactless card machines allow customers to make payments by simply tapping their card, smartphone or wearable device on the terminal. These machines use Near Field Communication (NFC) technology to process transactions quickly and securely.
It’s ideal for businesses that prioritise speed, e.g., fast-food restaurants.
- Portable machine:
Portable bank card machines are the ones that can be brought to the customer so they can swipe or tap their card to make the payment rather than going to the card machine themselves. This machine is great for takeaway businesses like ice cream shops and butcher shops.
- Virtual terminal:
It works by processing payments through a software interface rather than a physical device. You have to manually enter the payment information of your customers and the system will take care of the rest.
It’s great for businesses that accept payments over the phone, e.g., freelancers or digital service providers like online coaches.
Another important question – who issues card machines, and do banks provide card machines? Well, most banks offer card machines as part of their merchant services. But you can request them from payment processors and POS system providers as well.
| Card machine type | Functionality |
|---|---|
|
Countertop
|
Typically stationary, connected via phone line or internet.
|
|
Mobile
|
Portable, connects via Bluetooth or cellular data
|
|
Contactless
|
Accepts payments via NFC (Near Field Communication)
|
|
Portable |
Lightweight and compact, connects via Bluetooth or cellular network; similar functionality to mobile machines but with a focus on ease of transport.
|
|
Virtual
|
Software-based, accessed via computer or mobile device; processes payments through a secure online gateway.
|
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.
How much does it cost a business to use a card machine?
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 – £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 off.
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.
