It’s no longer necessary to get stuck with a bad card machine deal, whether you’re thinking of hiring or buying one. So how much is a card machine for a small business in the UK?

The answer depends on the type of package. Many terminals you buy online are no longer expensive. Technological improvements have made it possible to produce simple payment terminals at a lower cost, whereas traditional card machines may still be pricey.

The pricing structure, contract and other factors also determine costs. Let us look at the different arrangements, then at their typical pricing.

Purchase vs rental

The card machine market is denser than ever, meaning fees are generally more competitive and contracts more suitable for small businesses. But what do the pricing options look like, broadly?

You can either buy a card machine upfront or hire one for a monthly fee as part of a contract:

Purchase

  • Own the card machine outright

  • No monthly fee or lock-in

  • Pay-as-you-go (PAYG) fees for transactions

  • Affordable card readers can be bought online

Rental

  • You don’t own the card machine and return it at end of contract

  • Fixed monthly fee

  • 6-36 months’ contract

  • Usually high-end terminals that would be expensive to buy

Different types of card machine providers tend to prefer just one of these price structures (renting or purchase). What’s more, the price of a card payment machine depends on what sort of terminal it is.

Buying a card machine

App-based card readers (also called mPOS readers) are the cheapest card machines, because they depend on a connection with a smartphone or tablet to work. You’ll need to download the associated app on your mobile device, then sync it with the card reader over Bluetooth.

These devices are provided by payment facilitators like Zettle, SumUp and Square. They make their money through a transaction fee and add-on services connected to the card reader account, keeping the start-up cost down to a minimum.

The price of mPOS card readers are mostly in the region of £15-£30 excluding VAT. There’s no fee for shipping or account creation. These are the most popular options:

Square SumUp Zettle
Square Reader SumUp Air iZettle Reader 2
Square Reader
Review
SumUp Air
Review
Zettle Reader
Review
Upfront purchase:
£16 + VAT
Free shipping & setup
Upfront purchase:
£19 + VAT
Free shipping & setup
Upfront purchase:
£29 + VAT
Free shipping & setup
Square SumUp Zettle
Square Reader SumUp Air iZettle Reader 2
Square Reader
Review
SumUp Air
Review
Zettle Reader
Review
Upfront purchase:
£16 + VAT
Free shipping & setup
Upfront purchase:
£19 + VAT
Free shipping & setup
Upfront purchase:
£29 + VAT
Free shipping & setup

Payment facilitators may also offer standalone card readers that work wirelessly over WiFi and/or 4G, 3G or GPRS. These uniquely-designed, independent card machines are priced in the region of £100-£200 excluding VAT. They are more expensive than mPOS readers because they work without a mobile app.

If mobile connectivity is a feature, the terminal often comes with a built-in, free SIM card with data included.

Here are some of the best examples at the moment (note that myPOS charges for shipping, whereas SumUp and Square don’t):

Square SumUp myPOS
Square Terminal front SumUp Solo myPOS Carbon
Square Terminal
Review
SumUp Solo
Review
myPOS Carbon
Review
Upfront purchase:
£149 + VAT
Free shipping & setup
Upfront purchase:
£59 + VAT
Free shipping & setup
Upfront purchase:
£189 + VAT
£10 + VAT shipping fee
Square SumUp myPOS
Square Terminal front SumUp Solo myPOS Carbon
Square Terminal
Review
SumUp Solo
Review
myPOS Carbon
Review
Upfront purchase:
£149 + VAT
Free shipping & setup
Upfront purchase:
£59 + VAT
Free shipping & setup
Upfront purchase:
£189 + VAT
£10 + VAT shipping fee

Payment facilitators like Zettle and Square design their own freestanding terminals and sell them at a relatively low price compared with traditional card machines. Then you have just a pay-as-you-go rate per card transaction and no lock-in.

What if you want a traditional card machine manufactured by Verifone or Ingenico? If you’re lucky to find them for sale, they cost in the region of £200-£800, usually somewhere in the middle. It is virtually impossible to find any purchase prices online, but some merchant service providers can give you quotes upon request.

Unless you are covered by a warranty or maintenance package (extra cost), fixing or replacing these mainstream card machines can be expensive. A card processing contract and transaction fees would also have to be paid on an ongoing basis so you are able to use them at all.

Given the high upfront purchase price, the vast majority of small businesses don’t buy these ubiquitous terminals. Instead, they are rented or leased over a period of months or years, which includes everything you need to accept and process card payments.

Should you buy a card machine?

Apart from selling the cheapest payment terminals, payment facilitators like Square and SumUp don’t require commitment, monthly costs or a minimum sales volume. You pay as you go, use it as little or much as you like and are free to stop using it any time without cancellation charges.

Instead, payment facilitators offer optional, extra tools for online and in-person payments. Many of these are by default free, but you can, for instance, subscribe to more advanced POS systems.

This is much friendlier than paying hundreds of pounds for a standard card machine, or hiring a terminal with a potentially complicated contract designed to keep you as a customer.

Renting a card machine

If you go to a payment service provider or acquirer, you will be given options to rent a card machine rather than purchasing one. This locks you into a monthly fee and contract commitment of typically 12-36 months, although shorter (6 months) and longer (up to five years) may be offered too.

You can rent for the very short term, but this is usually more pricey and only recommended for one-off situations where you want the best card machine for a day, weekend or up to a month.

You may pay separately for a SIM card and data for a mobile terminal, but it is increasingly common to have mobile data included in the monthly hire fee.

The fixed, ongoing cost depends on the terminal model and falls in the region of £10-£30 + VAT per month. A stationary, countertop terminal is typically cheapest. WiFi/portable terminals are in the mid range, while the 3G/mobile card machines with a SIM card incur the highest monthly cost.

Takepayments Dojo Worldpay
Takepayments Move 3500 card machine Dojo Go terminal Worldpay credit card machine
Takepayments
Review
Dojo
Review
Worldpay
Review
Rental:
£10+/mo + VAT
18-month lock-in
Other costs apply
Rental:
£20/mo + VAT
6-month lock-in
Other costs apply
Rental:
£18+/mo + VAT
18-month lock-in
Other costs apply
Takepayments Dojo Worldpay
Takepayments Move 3500 card machine Dojo Go terminal Worldpay credit card machine
Takepayments
Review
Dojo
Review
Worldpay
Review
Rental:
£10+/mo + VAT
18-month lock-in
Other costs apply
Rental:
£20/mo + VAT
6-month lock-in
Other costs apply
Rental:
£18+/mo + VAT
18-month lock-in
Other costs apply

Some providers don’t charge for setting up, but it’s common to pay an upfront account creation fee, installation cost for the chip and PIN machine and/or a general setup fee. You may also have to pay for shipping.

What you should know about a rental contract

Renting a terminal typically means you’re stuck in the contract until you cancel it, but cancelling early leads to an early termination fee. This is often the equivalent of paying out the remaining charges of the contract period. This often amounts to hundreds of pounds, but some providers let you off for a lower cost.

Often, you need to cancel 30-90 days before the end of the contract – otherwise, it auto-renews and you’d need to pay an early termination fee for the new contract. Many micro-merchants have in this way committed to a new term without their active consent, so we strongly recommend reading the small print on this when signing up.

You may pay a lower monthly cost with a longer commitment, which is something stable businesses with enough certainty about the future can consider in negotiations with terminal providers.

Whether you rent or buy your card machine, transaction fees are a separate cost we will now elaborate on.

Transaction fees

If you buy a card machine, you get the simplest pricing model: a pay-as-you-go fee per successful card transaction. The leading options from Zettle, SumUp and Square charge the same fixed rate for domestic, foreign and premium debit and credit cards – very simple to get your head around.

Since there’s no contractual commitment, you can accept cards as rarely or often as needed and stop any time without an exit fee. Though the rates are the same for everyone, a monthly turnover above £10k-£16k may qualify you for lower fees.

With a rental contract, transaction fees depend on your sales volume, contract length, business type (high-risk businesses get higher fees) and types of cards accepted. Based on these things, you get a custom quote before signing up.

Variable fees can save you money if you mostly accept domestic consumer cards from Visa and Mastercard (lowest fees), whereas foreign, premium credit cards (highest fees) can bump up costs considerably.

Purchase – transaction fees Rental – transaction fees
1.69%–1.75%
(any card)
0.2%-3.5% + 5p-60p
(depending on card type)
Other fees may apply to: Other fees may apply to:
  • Refunds: 0%-1.75%
  • Chargebacks: £0–£10 each
  • Refunds: £1.50+
  • Chargebacks: £0–£30 each
  • Currency conversion: 0.5%-2.5%
  • Authorisation fee: 1p-3p
Purchase
– transaction
fees
Rental
– transaction
fees
1.69%–1.75%
(any card)
0.2%-3.5% + 5p-60p
(depending on card type)
Other fees may apply to: Other fees may apply to:
  • Refunds: 0%-1.75%
  • Chargebacks: £0–£10 each
  • Refunds: £1.50+
  • Chargebacks: £0–£30 each
  • Currency conversion: 0.5%-2.5%
  • Authorisation fee: 1p-3p

Whether you buy or rent, other costs may apply to certain transactions, mainly chargebacks (£0-£30) and refunds (e.g. £1.50). With chargebacks, you will also lose the transaction amount if the customer dispute was resolved in the buyer’s favour.

If you accept foreign cards where a currency is converted, a currency conversion fee of 0.5%-2.5% is usually added to the transaction fees. Many purchased card readers do not have this charge, though.

Other transaction charges may apply to a rental plan, for example if a card payment is ‘uncaptured’ (not completed) or a specific card type incurs an additional check. These extra costs are hard to predict but typical of charges with a rented card machine

Different pricing structures

What kinds of transactions pricing can you get with a rental agreement? They can be blended or in an interchange++ format.

Interchange plus plus: Reflects the true cost of a card transaction, because it charges the exact fees of card networks (e.g. Visa, Mastercard), card issuer (cardholder’s bank) and acquiring bank processing the payment (e.g. Worldpay, Barclaycard), plus a markup determined by your payment service provider.

Each transaction may be charged all of these fees, depending on the type of card:

  • Interchange rate: 0.2-2.25%
  • Card scheme fee: 3-10p + 0.01-1%
  • Acquirer/markup fee: 20-60p

Blended fees: Simplifies the true cost by ‘blending’ the above interchange, card scheme and markup fees into a simple fee that applies to a broader umbrella of transactions. Blended pricing may be preferred if you want more predictable fees, but it may not be the cheapest option overall.

Blended transaction fees on a rental plan are typically between 0.6-3.5% + 5-25p, depending on the card and your business category. Payment facilitators like SumUp only apply one percentage rate to all card machine transactions – the simplest kind of blended fee there is.

Often myriads of (other) costs on a rental contract

A rental contract with a merchant service provider or acquirer may include a range of unavoidable extra changes for individual parts of the service. Such additional fees are a normal part of contractual packages, whereas payment facilitators tend to avoid them.

The one-off and fixed, ongoing fees in a hire contract may include:

Rental plan items Cost
Setup fee £0 – £150
Merchant account £0 – £15+/month
Online access to reports £0 – £5/month
Paper statements Fees sometimes applies
Monthly minimum charge £20-£40 depending on turnover
Payouts £0 – £1.50 per batch
PCI-DSS compliance £0 – £250/year
Terminal servicing £0 – £150 per instance
Early termination £0 – £1200 (buyout of contract)
Rental plan
items
Cost
Setup fee £0 – £150
Merchant account £0 – £15+/month
Online access to reports £0 – £5/month
Paper statements Fees sometimes applies
Monthly minimum charge £20-£40 depending on turnover
Payouts £0 – £1.50 per batch
PCI-DSS compliance £0 – £250/year
Terminal servicing £0 – £150 per instance
Early termination £0 – £1200 (buyout of contract)

Merchant account fee: Transactions have to be processed through a merchant account. Unless the terminal provider gives you a packaged deal with a merchant account included, you will likely pay a setup fee plus ongoing monthly or annual charges for it.

If you want to accept American Express, an additional merchant account usually has to be set up directly with Amex.

Monthly minimum service change: Many contracts require that you pay a minimum in transaction charges a month. If, for example, your monthly minimum is £25 and transaction fees only amount to £10, you will pay a total of £25 that includes the (less than £25 total) transaction fees you legitimately owed that month.

Reporting: You should as a minimum be able to view transaction charges and payments processed in an account online. However, some companies will charge a monthly fee for even the most basic functions like exporting sales to Excel or getting a paper copy of transactions.

PCI compliance: You may have to fill in PCI-DSS compliance paperwork in order to comply with card industry standards. This may be 100% your responsibility where you set this up yourself (can cost extra if support is required), or you may submit the documentation for free through your terminal provider.

If you have not set this up in the first few months, you may have to pay a PCI non-compliance fee every month you don’t have this in place (e.g. £9.99 per month).

Payouts: Some merchant accounts charge per payout batch, e.g. £1.50 every time transactions are paid into your bank account. If you require next-day payouts, this fee may be higher. In recent years, more card machine providers have scrapped the payout fee altogether, though.

Terminal replacement and servicing: Companies offering next-day terminal replacement usually charge for it. If faults fall under the warranty or the contract covers repairs, you may be able to avoid this cost altogether, but any urgent servicing is rarely free.

Terminals without lock-in: See pricing for the top budget card machines

What to consider

Here are some things to consider before you decide on a card machine package:

  • Are you confident in where your business will be in a year’s or two years’ time? If your card sales are unpredictable, a long-term contract with monthly fees and a cancellation charge is probably too risky.

  • Are you a fast-growing startup? If you are, choose a contract allowing an adjustment on charges (a larger sales volume can get you lower transaction fees) or start by buying a commitment-free card reader, then rent a terminal when sales become more predictable and you can get better rates.

  • Do you have time to read the small print in contracts and monitor charges? Realistically, do your day-to-day operations require all your attention, and would it mean you may overlook charges sneaking into your ongoing fees? This can happen with a rental contract, so we always recommend checking your monthly statements.

  • Do you accept more than £10k-£16k in card sales a month? Even with low-cost card readers, you can get lower transaction rates beyond this threshold and save money. If your sales are steady above this volume, a hire contract with a traditional terminal could still be best for you.

  • Do you want a traditional card machine or cheaper card reader? Many companies want the sort of mainstream terminal you see in supermarkets because they are the most durable and advanced. That said, a card reader from a payment facilitator is just as secure and efficient at a much lower price.

Conclusion

With a card reader from a company like SumUp or Zettle, you know fees are the same for everyone and without the hassle of contract lock-in or surprise charges. On the other hand, the simple, fixed transaction rate may be more expensive with a high, consistent sales volume.

Renting a card machine is riskier if you don’t know how your small business will fare in the next few years. You will get quotes based on your business type, turnover, requirements and level of commitment, but may equally get a bad deal if you don’t compare with other companies.

It’s important to familiarise yourself with the types of costs you can expect with a rented card machine to avoid getting a bad deal. And always: read the fine print before signing up, because sales reps can be pushy.

Summary of card machine charges:

Purchase Rental
No contract lock-in 6-36 months’ contract
Upfront cost
Reader w/app: £15-£20*
WiFi/SIM terminal: £100-£200*
Shipping: £0-£10*
Account creation: £0-£150*
Monthly cost
None Terminal rental: £10-£30*/mo
Merchant account: £0-£15*/mo
Reporting: £0-£5*/mo
Monthly min. charge: £20-£40/mo
PCI compliance: £0-£20*/mo
Transaction fees
1.69%–1.75% (any card) 0.2%-3.5% + 5p-60p (depends on card)
+ 0.5%-2.5% currency conversion
Other costs
Refunds: 0%-1.75%
Chargebacks: £0-£10
Refunds: £1.50+
Chargebacks: £0–£30 each
Authorisation fee: 1p-3p
Payouts: £0-£1.50
Terminal servicing: £0–£150
Exit fee: £0-£1200

*Excluding VAT.

Purchase Rental
No contract lock-in 6-36 months’ contract
Upfront cost
Reader w/app:
£15-£20*
WiFi/SIM terminal:
£100-£200*
Shipping:
£0-£10*
Account creation:
£0-£150*
Monthly cost
None Terminal rental:
£10-£30*/mo
Merchant account:
£0-£15*/mo
Reporting:
£0-£5*/mo
Monthly min. charge:
£20-£40/mo
PCI compliance:
£0-£20*/mo
Transaction fees
1.69%–1.75%
(any card)
0.2%-3.5% + 5p-60p
(depends on card)
+ 0.5%-2.5% currency conversion
Other costs
Refunds:
0%-1.75%
Chargebacks:
£0-£10
Refunds:
£1.50+
Chargebacks:
£0–£30 each
Authorisation fee:
1p-3p
Payouts:
£0-£1.50
Terminal servicing:
£0–£150
Exit fee:
£0-£1200

*Excluding VAT.