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Credit card terminals in the UK

A credit card terminal, sometimes called a card machine or PDQ terminal, is a vital tool for any merchant. But if you’re reading this, you probably don’t need to be convinced of their benefits.

What you’re wondering is: with so many card terminals out there, how do I go about choosing the best one for my business?

It can been tempting to take the easy road and go with whichever provider ranks first in Google. But don’t. That’s a potentially costly shortcut. Instead, spend just nine minutes 25 seconds reading our handy guide and learn everything you need to know to make an informed choice.

We’ll take you through the different types of card terminals available. We’ll offer clarity on the murky subject of card terminal costs. And we’ll pick out three of the best card terminal providers in the UK.

Less than ten minutes of your time, and it could save your business hundreds of pounds a year...

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What is a card machine?


Types of credit card terminal

There are four different types of card terminal. Each has the same basic functions: they allow customers to pay using chip-and-pin or contactless, or by swiping or manually entering card information. But not all card terminals are created equal. We’ve highlighted the key differences below.

The four types of credit card terminal are:

  • Countertop credit card terminals
  • Wireless credit card terminals
  • Mobile credit card terminals
  • Virtual credit card terminals (MOTO payments)

Countertop credit card terminals

Countertop card terminals are a cost effective card payment solution designed for businesses that operate from a fixed location.

They’re ideal for retailers such as supermarkets, high-street shops and fast food outlets. Any business where the point of sale is, well, at the counter.

By connecting directly to a phone line or the internet with a cable, countertop terminals do away with the need for wireless technology. And because of this they’re usually quite a bit cheaper than portable models.

Modern countertop card terminals take chip-and-pin, contactless and magstripe card payments as standard.


Wireless credit card terminals

A wireless credit card terminal allows you to take card payments from anywhere on the premises. This makes them a natural fit for the hospitality sector, where the point of sale is often at the customer’s table.

Most businesses choose to connect their portable card terminal to the network via WiFi. But if you don’t have an internet connection, it can be paired with a base station using Bluetooth and connected to a traditional phone line too.

Read more about wireless card terminals >


Mobile credit card terminals

A mobile credit card terminal offers ultimate flexibility. Just like your smartphone, it connects to a satellite network, allowing you to take card payments anywhere with GPRS or 3G/4G coverage.

Mobile credit card terminals have transformed the world of credit card processing. Businesses that would have previously relied on cash payments or invoicing can now process high-volumes of card payments quickly and easily. Think food truck vendors, cab drivers, tradesman.

Most mobile credit card terminals come with a roaming SIM card, which connects to the best network signal available. Increasingly though, providers are rolling out cheaper versions targeted at small businesses. These work by pairing with your smartphone or tablet device via a free app and piggybacking its network coverage.

Read more about mobile card terminals >


Virtual credit card terminals (MOTO payments)

A virtual card terminal is an online portal that allows your business to take card payments over the phone. This type of transaction is what is called Mail Order and Telephone Order (MOTO) transaction.

A virtual card terminal works in much the same way as a physical card terminal. It encrypts sensitive payment information and transmits it to the merchant service provider securely. Unlike a face-to-face payment though, the merchant logs in to the system and enters this information manually.

Without any hardware to configure, a virtual terminal is incredibly fast to setup. Once your application is approved, you can be up and running on the system in a matter of minutes. And you’ll be able to start trading immediately.

Read more about virtual card terminals >

Contactless payments

Contactless is the fastest growing method of payment in the UK. Recent figures from the British Retail Consortium show that 10 years after it was first introduced, contactless card payment now accounts for one in three of all UK transactions. This is up from just one in ten as recently as 2015.

According to London Business School professor Niro Sivanthan, this is because contactless payment acts as a kind of anesthetic. It numbs us to the psychological pain of parting with our hard earned money, “seducing us into splashing out”.

But whatever the reasons behind its growing popularity, two things are clear: cash is dying and businesses that don’t accept contactless payments are missing a trick.

Modern card terminals, whether countertop, wireless or mobile, come with a contactless payment facility as standard. If yours doesn’t, you’ve been sold a dud. Or it’s really old and you should definitely upgrade it.

Transaction fees for contactless payments vary a lot. Some providers will charge as much as 4p, while others won’t charge anything at all.

If your business processes a high volume of low value transactions, finding a merchant service provider that doesn’t charge a fee for contactless payments could save you thousands. To ensure you’re getting the best deal on a card terminal for your business, simply fill in this form and compare quotes from multiple providers.

How much does a credit card terminal cost?

rent or buy

The eternal question: how much does a credit card terminal cost? A question asked by merchants since the dawn of electronic payment processing (about 30 years ago).

Go on any major merchant service provider’s website and you’ll probably find they don’t advertise their pricing. This is because the true cost of a card terminal is the sum of lots of smaller charges that vary depending on the size and nature of your business.

Sounds kind of vague and confusing, right? That’s because it is. But don’t worry, we’re here to help you make sense of things. Starting with merchant accounts…

Merchant accounts

A merchant account is type of credit account provided by a merchant bank. It’s different to a regular business bank account, and number one on the list of things you need to take card payments. Without a merchant account, a card terminal is about as useful as a chocolate teapot.

Some merchant account providers charge a setup fee, but this is becoming increasingly uncommon. “So how does the bank make its money?”, you may ask. Well, that’s where transaction fees come in.

Read more: What is a merchant account and how does it work?

Read: Our guide to HSBC's Merchant Services

Transaction fees

Transaction fees are typically charged as a percentage of the transaction plus a fixed ‘authorisation fee’. These vary depending on the volume and total value of transactions processed. But generally speaking the more money you take, the less you pay in fees.

A UK small business processing around £90k in card payments annually can expect to pay the following:

  • 0.7% on debit cards
  • 1.3% on credit cards
  • 3.17p authorisation fee
Beware a minimum monthly service charge — a cheeky spend threshold set by some providers. It is the minimum amount you will be required to pay in fees each month, regardless of the number of transactions processed.

PCI DSS compliance

Any business handling card payments must comply with the Payment Card Industry Data Security Standard (PCI DSS). It’s a series of checks to ensure your company processes and stores cardholder data securely.

There are four levels of PCI compliance, level one being the lowest, four the highest with the most stringent checks.

The level that your company will be expected to comply with is determined by the total number of card transactions processed annually. For most small businesses in the UK, PCI level one compliance applies.

The level one checklist consists of about 200 questions. You can choose to complete it yourself, or you can pay a merchant service provider a fee of around £5 per month to do it for you. For the sake of £60 a year, we suggest you save yourself the hassle and do the latter.

Card terminal costs: renting vs buying

Purely based on cost, in the long run it pays to buy a card terminal outright. Take Worldpay, for example. They’re one of the world’s largest merchant service providers. Worldpay charge UK small businesses £27.54 a month to rent a wireless card terminal.

A minimum hire contract with Worldpay is 18 months. So rental customers will pay a total of £495.72. This compared to a one off payment of around £250 to buy a portable card terminal outright.

On the face of it it may seem like a no-brainer, but there are other factors to consider.

Rental terminals are covered by warranty. So if it breaks, your provider will replace it with a shiny new one (assuming you didn’t throw it against a wall or something).

And crucially, if you’re looking to save on transaction fees, merchant account providers offer more competitive rates to businesses that rent a card terminal from them too.

Countertop credit card terminal costs

Countertop credit card terminals are usually the cheapest option for businesses. Which makes sense, really. You wouldn’t spend as much on a landline as on a smartphone, would you?

Monthly rental price: £15-£20

One-off purchase price: £150-£200

Wireless credit card terminal costs

You can expect to pay a little more for a wireless terminal than for a countertop model. And for good reason. You’re paying for WiFi connectivity, Bluetooth connectivity. You’re paying for portability, and the ability to take card payments anywhere on the premises.

Monthly rental price: £20-£25

One-off purchase price:£200-£250

Mobile credit card terminal costs

Mobile credit card terminals fall into two categories: those that connect to smartphones and those that don’t.

Those that don’t come with their own roaming SIM card, which fits into a slot on the side. These are the type used by most UK small businesses and the prices are as follows:

Monthly rental price: £25-£30

One-off purchase price: £250+

Mobile card terminals that work by pairing with your smartphone or tablet are geared towards small businesses with a single point of sale and a low volume of card payments. They can be bought for as little as £50 . But transaction fees are generally higher, fixed at around 1.75% for both debit and credit cards.

Virtual terminal costs

Obviously, without the need for any hardware, costs for a virtual terminal are low. There is a monthly service charge, plus transaction fees, of course. If you’re being offered a virtual credit card terminal with no monthly fees your first question should be: “So what’s the catch?”.

Up to £50k a year in card payments: £9.95/month

Up to £250k a year in card payments: £14.95/month

Up to £250k a year in card payments: £19.95/month

Get Merchant Account Quotes Tailored To Your Business - Start Here

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Best card terminal providers UK

So you’ve already done the hard work. By identifying whether a countertop, wireless, or mobile card terminal is best for your business, you’ve narrowed down the list of potential supplier massively. Now let's look at the best supplier for each type of terminal.

Paymentsense — best countertop card terminal supplier

Why? Because Paymentsense offers some of the most competitive transaction fees around. They charge just 0.35% on debit cards and 0.95% credit cards. Plus, they offer to match or beat a quote from another provider. If you’re looking for a countertop card terminal, you’re probably looking to save money, and Paymentsense are the best provider to help you do that.

Full review

Worldpay – best wireless/portable credit card terminal supplier

Why? Because Worldpay makes some of the most robust wireless card terminals on the market. And when your staff are rushing about from table to table, droppages do happen. So you’ll want to make sure you have a card terminal that bounces back. If you’re worried about range, rest easy with the knowledge that Worldpay’s portable Bluetooth terminal can operate an impressive 100m from its base.

Full review

iZettle — best mobile credit card terminal supplier

Why? Because iZettle offers the most versatile, easy to use, and hands down coolest mobile card reader on the planet. You’ll have probably seen them about. They’re popping up on countertops everywhere — from street markets to high street shops. And for good reason. The iZettle reader costs just £34.80. Price plans are tailored to suit your business and there is no minimum monthly spend.

Full review

How do I get the best deal on a card terminal for my business?

So you know what type of card terminal you want. You’ve got an idea of the costs involved. And you may even have a provider in mind. But with over one hundred merchant service providers in the UK, how do you know you’re getting the best deal for your business?

You could spend from now until eternity calling each of them. Or, you could just fill in this form and receive a free same-day quote from up to four different providers. The questions asked are designed to match you with the most suitable card terminal provider for your business. There are no hidden fees, and there’s no obligation to buy.

So sit back and let us do the hard work for you.