It’s no longer necessary to get stuck with a bad card machine deal, whether you’re thinking of hiring or buying one. So what are the card machine charges applicable to 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.

What are your options?

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?

Types of pricing

Firstly, you can buy a card machine upfront or hire one for a monthly fee.

An upfront purchase means you own the card machine outright and only need to pay for transactions and other things applicable to your usage.

Hiring a card machine – where you pay a monthly fee – means you don’t own it and have to return it to your provider at the end of your contract. On the other hand, you get a high-end terminal model that would be expensive if purchased upfront.

There are many affordable card readers in the UK today that can be purchased upfront and come with pay-as-you-go (PAYG) fees and no contract lock-in.

If you opt for renting a card machine with a monthly fee, this usually comes with contractual commitment.

Different types of card machine providers tend to prefer just one of these price structures (renting or upfront purchase), so let’s look at who offers what.

Types of card machine providers

Payment facilitators: Newer fintech companies launching card readers in modern, unique designs. Geared towards small businesses, they typically have no contract or monthly fee, just an upfront card reader price and pay-as-you-go rates.

Payment service providers: Companies offering card machines, online payment tools and typically a better service for small businesses. With a monthly fee, mix of costs and lock-in, but contracts have got shorter in the last few years.

Acquiring banks: Traditional players that offer traditional card machines, card processing and merchant accounts directly to bigger businesses, mainly. Fees are tailored, but contracts are typically longer and more archaic.

Let’s put this information together in an overview of options:

Payment
facilitators
Payment service
providers
Acquirers
Examples:
SumUp, Zettle, Square
Examples:
Takepayments, Dojo
Examples:
Worldpay, Barclaycard
Card machines:
mPOS readers
Unique mobile terminals
Card machines:
Traditional (e.g. Ingenico)
SmartPOS
Card machines:
Traditional (e.g. Ingenico)
SmartPOS
No monthly fee
Pay-as-you-go
Monthly fees
Contract lock-in
Monthly fees
Contract lock-in
Fixed
transaction rate
Custom or fixed
transaction rates
Custom
transaction rates
Payment
facilitators
Payment
service
providers
Acquirers
Examples:
SumUp, Zettle, Square
Examples:
Takepayments, Dojo
Examples:
Worldpay, Barclaycard
Card machines:
mPOS readers
Unique mobile terminals
Card machines:
Traditional (e.g. Ingenico)
SmartPOS
Card machines:
Traditional (e.g. Ingenico)
SmartPOS
No monthly fee
Pay-as-you-go
Monthly fees
Contract lock-in
Monthly fees
Contract lock-in
Fixed
transaction rate
Custom or fixed
transaction rates
Custom
transaction rates

Price of a card machine

The price of a card payment machine totally depends on what sort of terminal it is, whether you purchase or rent it, and which type of provider you’re going with.

App-based card readers (pay as you go)

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 to £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:
£29 + VAT
Free shipping & setup
Upfront purchase:
£19 + VAT
Free shipping & setup

Standalone card terminals (pay as you go)

Payment facilitators may also offer standalone card readers that work wirelessly over WiFi and/or 4G, 3G or GPRS. These are more expensive because they work independently. If mobile connectivity is a feature, the terminal often comes with a built-in, free SIM card with data included.

Like the mPOS readers above, payment facilitators 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.

These standalone card machines with pay-as-you-go rates are priced in the region of £100-£200 excluding VAT. 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:
£99 + VAT
Free shipping & setup
Upfront purchase:
£189 + VAT
£10 + VAT shipping fee

Renting a card machine (monthly subscription)

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 e.g. 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. Then we have WiFi/portable terminals 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

Some providers don’t charge for setting up, but it’s common to pay an upfront account creation fee, installation cost for the terminal 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 from a payment facilitator, you get the simplest pricing model: a simplified pay-as-you-go transaction fee per successful card payment. This may just be the same fixed rate for any type of card accepted, or different fees for different card types, for example:

Transaction fees (payment facilitators)
Single fixed rate – examples Few blended fees – example
Square, Zettle: 1.75% (all cards)
SumUp: 1.69% (all cards)
myPOS: 1.1% + 7p for EU/EEA Visa & Mastercard, 2.85% + 7p for other cards
Refunds: Free or small fee
Chargebacks: Free or up to £25
Transaction fees
(payment facilitators)
Single fixed rate
– examples
Few blended fees
– example
Square, Zettle: 1.75% (all cards)
SumUp: 1.69% (all cards)
myPOS: 1.1% + 7p for EU/EEA Visa & Mastercard, 2.85% + 7p for other cards
Refunds: Free or small fee
Chargebacks: Free or up to £25

As seen above, myPOS adds a fixed fee (7p) to their two fixed rates, whereas the others only have one fixed percentage rate even for foreign, premium or business cards.

Although these fees are the same for everyone by default, a monthly turnover above £10k-£16k may qualify you to ask for lower, custom rates.

Since there is no contractual commitment, you can accept as few or many transactions as needed, and avoid charges when you stop accepting cards.

A few other costs may apply to certain transactions, in particular chargebacks (£0-£30) and refunds (typically, the original transaction fee is retained).

Fees are customisable with a rental contract

With a rental contract from a payment service provider or acquirer, 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.

The transaction fees can be blended or in an ‘interchange plus plus’ format. The latter 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 that processes the payment (e.g. Worldpay, Barclaycard), plus a markup of your chosen payment service provider.

The card issuer and card network fees vary depending on the exact card being processed, whereas the acquirer and payment service provider fees are determined at sign-up when assessing your predicted turnover and business type.

>> Learn more about Interchange Plus Plus pricing here

Blended fees simplify the true cost of the interchange plus pricing by ‘blending’ these costs into more general fixed fees and rates that apply 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.

Transaction fees (payment service providers, acquirers)
Interchange Plus Plus pricing Blended pricing
Example of fee structure:
0.2-2.25% (interchange fee)
+ 3-10p + 0.01-1% (card scheme fee)
+ 20-60p (acquirer/markup fee)
Example of fee structure:
1.5% + 25p for domestic Visa & Mastercard consumer cards, 2.5% + 25p for foreign or premium card types
Currency conversion: Fee may apply
Failed transactions: Fee may apply
Refunds: Cost applies
Chargebacks: Fee applies
Other transaction-related fees may apply
Transaction fees
(payment service providers,
acquirers)
Interchange
Plus Plus pricing
Blended pricing
Example of fee structure:
0.2%-2.25% (interchange fee)
+ 3p-10p + 0.01%-1% (card scheme fee)
+ 20p-60p (acquirer/markup fee)
Example of fee structure:
1.5% + 25p for domestic Visa & Mastercard consumer cards, 2.5% + 25p for foreign or premium card types
Currency conversion: Fee may apply
Failed transactions: Fee may apply
Refunds: Cost applies
Chargebacks: Fee applies
Other transaction-related fees may apply

Regardless of the pricing structure (interchange plus or blended), you can expect the lowest fees for domestic Visa and Mastercard, and the highest for American Express, JCB, Diners Club and other premium, foreign-issued cards.

On average, the cost of a transaction on a payment service provider or acquirer contract will be around 0.6%-3.5% + 5p-25p (fixed authorisation fee) with blended pricing, or 0.2%-2.25% + 0.01%-1% + 3p-10p + 20p-60p with interchange++ pricing, depending on the card and what category your business falls under.

If you accept foreign cards where a currency is converted, a currency conversion fee of 0.5%-2.5% is typically added to the transaction fees.

Other transaction charges may apply, 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.

You will most likely have to pay up to £30 per chargeback and a fixed fee (e.g. £1.50) per refund processed.

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

Other costs

On top of the costs of a card machine and transactions, your particular package may have a range of other fees you can’t escape from. Such additional fees are a normal part of a card machine contract from a traditional acquirer or payment service provider, whereas payment facilitators tend to avoid them.

Few additional costs with payment facilitators

The key things for payment facilitators like Square and SumUp are the lack of lock-in, no monthly cost and no minimum sales volume required. 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. This is much friendlier than hiring a terminal with a potentially complicated contract designed to keep you as a customer.

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.

Myriads of costs on a rental contract

In contrast, a rental contract with a merchant service provider or acquirer may include a range of unavoidable extra changes for individual parts of the service. These charges can be fixed and ongoing or applied only when relevant.

The fixed, ongoing fees added to a hire contract may include:

Monthly or annual fee for merchant account: To receive payments, the money has to be processed through a merchant account and settle in your business bank account. The terminal provider will set you up with an acquirer providing the merchant account, or if you get a card machine from the acquirer directly, the merchant account will be with them.

Unless the terminal provider offers you a packaged deal with a merchant account included, you will likely pay a setup fee plus ongoing monthly or annual charges for the merchant account.

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

Monthly minimum sales volume: Many contracts make it a requirement to pay a minimum in transaction charges a month.

For example, Worldpay may require that you at least pay £25 in transaction fees a month – if not, they will charge you £25 that month, which covers 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 + VAT per month).

Item added to rental plan Monthly fee*
Merchant account £0 – £15+/month per merchant account
Online access to reports £0 – £5/month
Monthly minimum charge Minimum amount you agree to pay/month if transaction fees don’t reach this value
PCI compliance £0 – £250 annually + non-compliance fees
Item added
to rental plan
Monthly
fee*
Merchant account £0 – £15+/month per merchant account
Online access to reports £0 – £5/month
Monthly minimum charge Minimum amount you agree to pay/month if transaction fees don’t reach this value
PCI compliance £0 – £250 annually + non-compliance fees

Other miscellaneous or one-off costs may include:

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.

Refunds and chargebacks: If you were to refund an amount back to a customer, you may have to pay a refund fee. The same applies to chargebacks, which can cost up to £30 in admin fees, plus potentially losing the transaction amount if the customer dispute was resolved in the buyer’s favour.

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.

Cost item Typical charges*
Setup fee £0 – £150
Payouts £0 – £1.50 per batch
Reports Sometimes applies to paper statements
Refunds £0 – £1.50 (transaction fee may be added)
Chargebacks £0 – £30 each
Terminal servicing £0 – £150 per instance
Early termination £0 – £1200 (buyout of contract)
Cost item Typical
charges*
Setup fee £0 – £150
Payouts £0 – £1.50 per batch
Reports Sometimes applies to paper statements
Refunds £0 – £1.50 (transaction fee may be added)
Chargebacks £0 – £30 each
Terminal servicing £0 – £150 per instance
Early termination £0 – £1200 (buyout of contract)

Can you buy a card machine from a traditional player?

If you buy a card machine from a merchant service provider or acquirer, you still need a traditional merchant account to accept payments, and transaction fees are of course unavoidable. Merchant accounts may carry a fixed monthly fee, so buying does not necessarily mean you avoid ongoing charges. And unless you are covered by a warranty or maintenance package (costs extra), fixing or replacing the terminal can be expensive.

The upfront price of a traditional card machine manufactured by Verifone or Ingenico ranges between £200-£800, usually somewhere in the middle of that.

Almost all merchant service providers prefer renting out or leasing over selling, in part because it is more affordable for merchants than buying upfront – but also to lock you into a contract with ongoing fees. It is virtually impossible to find any purchase prices online, but some providers can give you quotes upon request.

What to consider

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 usually the riskiest option 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.

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, either choose a contract that allows 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? We’re not asking “are you lazy/disorganised”. We’re asking – realistically – do your day-to-day operations require all your attention, and would it mean you may overlook key charges that your payment company can sneak 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 rather than a pay-as-you-go 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.