I’m going to shoot myself in the foot, right up front in this blog post. If you’re expecting a definitive recommendation for one particular card terminal make/model then read no further as you’ll only be disappointed. After all, different businesses have different requirements, which different card machines.
Let’s compare two small businesses.
First, a busy high street cafe. The cafe is small and the owner has packed in as many tables as possible. There’s no space for a counter so the cafe’s waiting staff take payment at the customer’s table. The cafe does about 200 transactions per day split between sit-in and takeaway.
Second, a local jeweller that specialises in high-value pieces. The shop has a fixed checkout area and its staff only process a handful of transactions per day.
Just looking at the basic business details, we can see there are some significant differences between the two businesses. The cafe needs a portable machine with a long-lasting battery whereas the jeweller needs none of those features. So the perfect card machine for the cafe isn’t necessarily the best option for the jeweller.
This goes back to what I said at the start: I can’t say one particular card machine is the best option for all businesses because that just doesn’t make sense!
Instead, what I can offer up are the questions you should be asking yourself to find a card terminal that meets your business needs. In this article, we’ll discuss whether the specific card terminal model is important, the importance of your turnover, where you plan to use your card machine and specific card machine features. Finally, we’ll briefly touch on EPOS systems and look at how card machines fit into a larger system.
Is the card terminal the key consideration in choosing your merchant service provider?
The first question we’ve got to ask ourselves is: is the card terminal a key consideration? In most cases, I’d give a resounding no. There are several reasons for this.
First, from a cost perspective, once you get above a few thousand pounds in monthly card turnover, the terminal rental costs are far lower than your processing charges/merchant service charges. A provider might charge £15 per month for a basic countertop card machine and £20 per month for a top-of-the-range portable machine. Yes, you’re saving with the cheaper terminal but it’s insignificant compared to your significantly larger payment processing costs.
Second, card machines are largely commoditised with most manufacturers offering the same or very similar features. Sure, some are marginally lighter, some have slightly better battery life but generally speaking there isn’t huge variances.
All modern terminals will support contactless, they’ll all support NFC payments, they’ll all support Bluetooth and WiFi connectivity and so on. So whether you go with an Ingenico, Verifone or Squire card machine, you’re probably receiving the same set of features.
Third and finally, most merchant service providers can provide most terminal types for you to choose from. After all, there isn’t a massive range of manufacturer choice in the UK market, which is dominated by Ingenico and Verifone. If you want a particular card machine, you can usually just ask for it.
All of that said, the card machine you select is still an important decision. In the next few sections, we’ll discuss some of the key things you ought to think about.
What’s your current and future card turnover?
The first thing you should think about is your current and predicted turnover.
The lower end of the market is served by pay-as-you-go mobile point of sale (mPOS) devices called card readers. Think of products like iZettle, SumUp and Square. You buy a card reader outright from a provider then pay payment processing fees whenever you accept a payment. Most card readers cost around £25 to buy outright and charge around 1.75% to process debit card or credit card payments.
|Monthly terminal rental||n/a||£15|
|Minimum monthly service charge||n/a||£20|
mPOS devices have significantly higher per transaction fees than the traditional card machine/merchant account packages. iZettle, for example, charges a 1.75% processing fee compared to a 0.4% (debit) and 0.9% (credit) processing fee for traditional packages.
Traditional card machines charge lower processing fees but come with a range of fixed fees that make them unattractive to low volume merchants. Expect to pay a minimum monthly service charge of around £15 to £25 on top of card machine rental costs.
Expect to pay around £40 per month for a traditional card machine before you’ve even taken any payments.
So the question you need to ask is: at what turnover level do the scales tip away from the mPOS devices (cheaper at lower turnover volumes) to a traditional package (cheaper at higher turnover volumes).
The tipping point is around £1,500 to £2,000 of card turnover per month.
Before deciding between a card machine and a card reader, I recommend you look at your forecasted sales to estimate how much you expect to take on cards. Then get some quotes for card readers and card machines based on those figures.
A lot of merchants we speak with are surprised at just how quickly the mPOS devices become uneconomical – until they do a detailed calculation!
Where will you use the terminal?
How and where you’ll use a card machine is a huge factor in determining which one is right for you. Thinking back to the two businesses I mentioned in the introduction, the cafe needs a card reader their waiting staff can use on the go. On the other hand, the jeweller can make do with a fixed countertop terminal as its staff only need to take payments at the checkout area.
There are three main ‘types’ of card machine available to merchants: countertop, portable and mobile. Each of the three has a range of benefits and drawbacks, making them attractive to different types of business.
Here’s a quick summary of each type of card machine.
- Countertop: Countertop card machines are physically secured to your countertop. They are typically mains powered and are often physically linked via USB or Ethernet.
- Portable: Portable card machines are battery-powered devices that communicate with a base station via Bluetooth or WiFi. They often have an in-built receipt printer.
- Mobile: Mobile card readers are also battery-powered but communicate directly with your merchant bank via GPRS or WiFi.
As I mentioned before, each of these card machines is designed for specific use cases.
Mobile card readers are designed for businesses operating remotely without a POS. Think market traders, etc.
Portable card readers are best for businesses that need to take payment throughout their premises. Think restaurants, cafes, bars and so on.
Countertop card readers are best for traditional business environments where payment is taken at one fixed location. Think supermarkets, retail, etc.
All card machine manufacturers make each type of device and its likely that any merchant service provider will also have several models to choose from.
Do I need an EPOS system?
For a small business, probably not. However, whether you need an EPOS system really depends on the size, complexity and inter-connectivity of your business software. If you’re the sort of business that runs stock management, customer loyalty, marketing, accounting and staff management software, a central EPOS system that integrates with each of these may be a good idea. On the other hand, if you’re a weekend trader, you probably don’t need something so complex.
Another question we’re often asked is: how much do EPOs system costs? Unfortunately, there isn’t really a set answer for this—but here’s a general estimate. If a traditional standalone terminal costs about £40 per month to rent, you should expect to pay between 2 and 3 times that for an EPOS system—around £80 to £120. Yes, there are cheaper and more expensive products available but that’s probably the mid-point.
What terminal features matter?
Maybe you’re the sort of person who has to optimise every decision and likes to get into the technical minutia to ensure you buy the best everything. So what should you look out for?
Going back a few years, the big decision was whether you wanted a contactless-ready terminal or a colour display. Nowadays contactless is mandatory and you’d struggle to find a black and white display on a terminal. Here are some important features that I’d keep an eye out for:
- Battery life: Battery life is obviously only relevant for portable and mobile terminals but it’s a very important consideration for these businesses. A busy restaurant can’t exactly ask their customers to wait around for ten minutes while their terminal recharges! Make sure you find a terminal that will last a full shift or buy two so you can swap them out.
- Size and weight: Again, this is only relevant to portable and mobile devices. As with anything you need to carry around, smaller and lighter is usually better.
- Robustness: Unfortunately, the smaller and lighter devices tend to be more delicate. If you operate in challenging environments—for example, outside where you’re exposed to the elements—prioritise robustness and weather-sealed models.
- Bluetooth or Wi-Fi: A lot of portable terminals connect to their base station via either Bluetooth or Wi-Fi. Which is best depends on things like building layout, strength of Wi-Fi and so on. If your smartphone struggles for Wi-Fi in parts of your premises, a card terminal will do no better!
Hopefully, we’ve demonstrated that the starting point in getting the right card terminal for your business isn’t actually picking a specific terminal. To choose the right card terminal for your small business, you must ask yourself five simple questions.
First, is the merchant service provider right for me? Consider the service and products they provide and importantly the cost. The right merchant service provider will always find the right card terminal for your business.
Second, calculate your turnover. If you process under £2,000 per month, you’re cheaper picking up an mPOS device. Over that threshold and you’re better off with a traditional card terminal.
Third, think about how and where you want to use your card terminal. Do you need to take payments throughout your premises or just at one designated checkout point?
Fourth, investigate how systems interact in your business. If your business is a hyperconnected digital utopia, you’ll want an EPOS system to tie everything together.
And fifth, what features are important (and useful) to your business. Think about weight, size, speed, integrated receipt printers, connectivity and so on.