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Credit Card Terminals in the UK

 

Credit card terminals are devices that transfer funds electronically from the customer to the merchant. Without a credit card terminal businesses would be unable to accept credit card transactions.

What Types Are There?

Although similar, each type of device differs in how payments are taken. Each method has inherent advantages and disadvantages, what these are will likely depend on the type of business using such a machine. Some may find the old fashioned chip and pin devices are sufficient enough for their needs, while others will require a mix of wireless and countertop devices.

Devices include the following:

  • Countertop Credit Card Terminal
  • Wireless/Portable Credit Card Terminal
  • Mobile Credit Card Terminal
  • Virtual Terminals (MOTO Payments)
credit card terminal types”countertop

Countertop Credit Card Terminal

The most commonly used card reader, countertop devices are particularly ubiquitous in the retail sector. Both small shops and large supermarkets employ the countertop model, including at self-serve tills, and the reliability that comes with wired technology means they are likely to remain the most widely used device for some time to come.

This does not mean, however, that they are not widely used elsewhere. Whether it is it a bank, tax office or restaurant, the wired countertop model is the easiest to use and most robust of all card readers.

credit card terminal

Do you need to take online payments?



At the low end, devices can be hired for as little as £5 per month, but will typically cost around £25 per month. Contracts can be long, up to four years, so it is also vital that the contract you sign is flexible.

Although highly affordable, entry level devices start from around £30, but with the advancement in payment technology, older models may become obsolete in the near future. This is something to consider if you need to purchase many units or expensive models.

”wireless

Wireless/Portable Credit Card Terminal

Wireless card readers are small handheld devices that can process payments remotely, as long as it is within the normal range of a Bluetooth connection. An important part of the hospitality sector for many years, they allow waiting staff to take and process orders automatically, from the customers table.

Another advantage with wireless devices comes when paying the bill, which can be done at the customer’s table, allowing for convenience in bill splitting, queries and payment.

The technology is reliable but devices do need charging regularly and Bluetooth connections can be problematic over large distances.

”mobile

Mobile Credit Card Terminal

Mobile devices are similar to wireless ones in that they can be used remotely, but differ in technology and scope. These devices are thought to be something of a game changer in regard to card payments in that a mobile phone or tablet is able to process payments in conjunction with a simple handheld, Bluetooth device. This allows even small businesses, with low volume transactions, to do so at minimal cost.

They have been used by businesses that process transactions outdoors for some time, such as market traders and events such as festivals. Outside payments use the same technology as you would find in a mobile phone or satnav, GPRS, which means as long as you have a satellite signal on your mobile phone or tablet, it is possible to take card payments.

There are some inherent problems with such devices that do need to be considered. Of course it is essential you have the proper satellite coverage, meaning some remote areas are unsuitable. This, however, is rarely a problem for the vast majority, as mobile phones are ubiquitous and in use globally.

The technology is reliable, but can be inconsistent compared to wireless and, particularly, wired countertop terminals, and devices tend not to be quite as robust as standard handheld models. But as the technology improves, and its use becomes widespread, these devices will likely remain a popular method in the future.

”virtual

Virtual Terminals (MOTO Payments)

There is a lot of confusion about what a virtual terminal is, but it is essentially an online portal that processes card payments in much the same way as a physical device.

MOTO stands for Mail Order and Telephone Order, whereby the retailer physically enters the card details of the customer over the telephone in order to process payments, something that can be used by a myriad of businesses. Virtual terminals are popular with take away restaurants, for example, opening up their services to customers who might not have cash available when ordering.

Although there are USB card readers that customers can use, typically it is up to the business to process these orders manually, so it can be a little laborious compared to other methods. On the up side there is no need to purchase, or hire physical terminals that can be expensive devices to accept card payments.

Some businesses have taken to offering virtual terminals for customers to self-serve, similar to the way supermarkets provide chip and pin technology in their self-service tills, and you can buy small terminals that provide basic card processing functions cheaply.

credit card terminal

Contactless Payments

Countertop, mobile and wireless card terminals can use contactless technology, meaning it is one of the fastest growing methods of payment in the UK. Small handheld devices and large countertop systems in most large stores, such as supermarkets and large retailers, are already in the process of being replaced by contactless models. While it is not cost-efficient for smaller businesses to follow suit if they already have older models installed, new businesses are increasingly employing the technology.

Contactless is beneficial for several reasons, but the main advantage comes from payments only requiring the customer, or staff, to hold the card against the reader, meaning they are processed in a matter of seconds. For a business with a high turnover of customers, or busy periods, this can have an enormous effect on efficiency, customer satisfaction and maximising profit.

On the down side, contactless has a current limit of £30, making it unsuitable for high cost retailers, such as furniture stores. Although this is likely to rise in the future (it was raised in 2014 from £20) security concerns mean a limit may remain in place. It should be noted, however, that contactless payments are making up well under 1% of all credit card fraud.

How Much Does A Credit Card Terminal Cost?

There are many considerations to take into account when choosing a credit card machine, and costs vary wildly depending on your businesses needs and scope. Long term planning is also essential as some systems can become unsuitable if your business is likely to expand in the future. As credit card terminals, and merchant accounts, can be expensive, it is imperative that you read any contract you sign thoroughly before committing.

rent or buy

Purchasing or Renting Costs

The first decision you will need to make is whether to purchase or rent the machine. This is not necessary when using a virtual terminal and most mobile devices. You must then decide whether to open a merchant account, which has its own advantages and disadvantages. Finally, you will need to consider the usage fees and set up fees. As alluded to before, this will all depend on your requirements and circumstances

Whether you are renting or purchasing, a high level of support and installation should be provided.

Transaction Fees

Usage fees will depend on the volume of transactions your business processes. If you are using a merchant account your bank should provide a detailed description of all possible costs you might incur. The vast majority of time a percentage of the transaction value will inform the fee, but the more transactions you process, the more likely you will be offered a lower rate.

The typical percentage for usage is around 2-3% but can range between 1% and 5%.

Setup Fees

You will also need to consider setup costs when opening an account with any provider. These fees can be quite varied; typically they range from between £100 and £250 but some may charge as much as £500 before allowing you access to their service.

Countertop Credit Card Terminal Costs

Countertop machines can be the most complex or the simplest devices of all card readers. For example, a small retailer is able to use a wired handheld device, while large stores might require a complex integrated system.

At the low end, devices can be hired for as little as £5 per month, but will typically cost around £25 per month. Contracts can be long, up to four years, so it is also vital that the contract you sign is flexible.

The purchasing of a machine should be carefully considered as the technology can become obsolete or, at the very least, unsuitable to your needs if your business grows. Costs are generally between £200 and £1,000, but you should be aware that expense does not always guarantee quality.

Wireless Credit Card Terminal Costs

One of the considerations regarding portable devices, which is not usually the case for countertops, is the number of devices you will need. If you decide to rent, it does work out cheaper per unit if you acquire a large number of them as opposed to one or two devices, so you should consider whether the benefits outweigh the costs if you might only use one device.

Terminals start at around £30 to buy. High end models can cost as much as a several hundreds of pounds, but these tend to be bespoke devices for specific use.

It is hard to ascertain the exact cost of renting a wireless card reader as they tend to come in packages or be a part of a merchant account. As previously stated, it may also depend on the number of devices you hire. Prices start from around £5 per month per device but most can expect to pay more.

Mobile Credit Card Terminal Costs

If you are using mobile devices, and using devices you already own such as an iPod or iPhone, the cost of the device will not be a consideration. Such methods tend to suit small, infrequent use, such as a market stall. If you require several devices you can purchase bespoke models relatively cheaply. These are typically simple and easy to use, but many are able to process contactless cards.

Three of the most popular are SumUp, iZettle and Payleven. These devices cost between £50 and £80 and both iZettle and Payleven provide contactless machines. Transaction costs range between 1% and 2.75%, depending on volume, and payments are processed into your account within seven days. It should be noted, however, that many suppliers of mobile card processing charge higher rates than other methods. Generally speaking, monthly charges tend to be lower, however.

Minimum and maximum transactions will depend on a variety of factors, so it is important to understand how these relate to your circumstances before purchase.

Do you need to take online payments?



Virtual Terminal Costs

As a standard laptop, mobile phone or tablet with an Internet connection may only be required to process payments, equipment costs are not a problem regarding virtual terminals. There are, however, other costs to consider.

Transaction fees start from around 1.5%, but can be much higher with some providers. Monthly charges are low, typically £10, and some may waive this fee when you sign up to certain packages. There will likely also be a nominal gateway fee, which although small, can add up over time.

Merchant Accounts

A merchant account is a complete credit card reader package offered by banks and EPOS, Electronic Point Of Sales, providers. With a merchant account you are provided with devices, solutions and a high level of support.

The best providers offer bespoke packages and flexible options, meaning costs vary enormously. Set up fees are standard and range from between £50 to a few hundred pounds, while monthly charges can reach as much as £30. Transaction fees are in line with other card reader providers, around 1.5-3%, and equipment hire is similar to non-merchant account charges.

All charges listed can be much higher if the risk to the provider is high. This is a problem for businesses with poor credit ratings, as their options tend to be limited. It therefore pays to be patient when researching high risk options as many have found themselves tied to contracts that can restrict them financially in the long term.

How to Choose a Supplier

With so many providers and retailers to choose from, it can be difficult to know where to start regarding card payment readers. Generally suppliers will cater to a niche, so you can choose your supplier by finding out their unique selling point and finding which is best suited to your business.

Payment Sense - Countertop Supplier

Payment Sense is a merchant account service provider offering a high quality and affordable range of credit card terminals.

PaymentSense provide countertop models, as well as mobile phone and online payments. One of the main advantages they offer is ease of use and intuitive software. What’s more, their systems and devices can be simply interconnected, allowing a high degree of flexibility.

Supplier Rating: Read Review

Worldpay – Portable Credit Card Terminal Supplier

Arguably the most well known of all providers, Worldpay offer a full range of devices and services for small and large businesses alike.

All of Worldpay's portable devices are contactless capable and you can choose between Bluetooth or WiFi connections. Worldpay portable devices are known for their long battery life and all can be connected to mobile phone connections, which allows some degree of mobile transactions as well.

Supplier Rating: Read Review

iZettle – Mobile Credit Card Terminal Supplier

iZettle are one of the best known mobile providers in the UK, offering robust devices with long battery life.

iZettle's credit card terminals are affordable, easy to use and capable of processing contactless, swipe and chip and pin cards. Accepting more cards than most of its rivals, they are also one of the most widely used. With a high level of security, PCI PTS compliant, they also provide peace of mind for their customers.

Supplier Rating: Read Review