According to the latest statistics, over 80% of Americans own at least one credit card. As a small business owner, you can’t ignore the writing on the wall—consumers prefer to pay with credit cards. Businesses therefore must adapt.
To process these credit card payments, you need credit card machines. These ensure quick and easy transactions, helping businesses meet customer expectations and stay competitive.
However, choosing the right credit card machine can seem daunting when you set up a payment card ecosystem. What features should you look for? Where can you get them? Should you buy or lease them?
Don’t worry. We’ve put together this comprehensive guide that will answer all your questions about credit card machines for your small businesses.
What Does a Credit Card Machine Do?
The purpose of a credit card machine is to process credit card payments quickly and in a secure manner. No wonder they are so popular. In 2023, credit cards constituted 27% of all global point-of-sale (POS) spending—recording over $10 trillion in transactions!
Customers can tap, swipe, or insert their card at a credit card machine. The machine then connects and exchanges information with banks and card networks (e.g. Visa, Mastercard, Discover, etc.) to authenticate the transaction.
Within a few moments, the machine is able to verify if the customer has sufficient funds and approves or rejects the transaction accordingly. If the transaction is approved, the payment details are sent to the merchant’s bank, which then connects with the customer’s bank to complete the fund transfer.
It can take a few days for the business to receive the funds but the entire process is seamless for the merchant as well as the customer.
Benefits of credit card machines
If you’re still on the fence about getting a credit card machine, consider the numerous benefits they offer for small businesses.
- Firstly, credit card machines enable faster transactions and speed up the checkout process. Customers can swipe their cards, get their receipts, and walk out of the store in minutes.
- Secondly, they provide enhanced security during payment transactions and protect the business and customer from data breaches and fraud.
- Finally, credit card machines offer convenience to customers. Payment cards remove the need to carry large amounts of cash that can be stolen and are much more secure.
Different Types of Credit Card Machines
Choosing the right credit card machine for your small business can be a game-changer. Assess your requirements, setup, and technology infrastructure before you settle on one. Let’s explore the most common types of credit card machines.
1. Traditional countertop terminals
These are the credit card machines that you are probably most familiar with. They are usually large and fixed on a tabletop. Traditional countertop terminals must be connected to phone lines or ethernet to work.
These classic machines are often the first choice for small businesses as they offer uninterrupted services. As they are hard-wired, the connection is stable and payment processing can be carried out with a low risk of disruptions. They also have built-in printers for the smooth printing of receipts, adding to the overall convenience of these machines.
Traditional countertop terminals are best suited for brick-and-mortar establishments, restaurants, retail stores, and even service-based businesses that operate from a fixed, physical location. If your small business doesn’t require credit card processing systems to be moved around, then these machines will be a perfect fit.
2. Wireless credit card terminals
Unlike countertop terminals, wireless credit card terminals are portable. They are able to connect to cellular or Wi-Fi networks to process credit and debit card transactions. Hence, they allow people to accept payments wherever they are. As long as these devices are able to connect to a wireless network, they can work indoors or outdoors.
Wireless terminals are small and compact and offer all the functionalities of a countertop terminal. Customers can swipe, tap, and dip their cards into wireless terminals too. Advanced wireless terminals also have touchscreens and built-in receipt printers.
These terminals are the best choice for businesses that require mobility. For example, they are ideal for restaurants, cafés, food trucks, etc., that require staff to walk up to customers to accept payments. Service providers that offer home services such as handymen, plumbers, etc. can also benefit from such machines.
3. Mobile credit card readers
This is a small device that connects to your phone and converts it into a credit card reader. Mobile card readers use the Bluetooth or internet connection of the handheld device that they are attached to. The smartphone or tablet such a device is connected to can then be used as a handheld POS system.
Usually, these readers come with software or apps that not only help mobile devices detect and connect to mobile credit card readers but also generate electronic receipts, track sales, provide reports, and manage customer information.
These are perfect for small businesses just starting out that do not want to invest in a lot of equipment right away. When sales volumes are still low, these devices are enough to handle all credit card transactions.
They are great for startups, freelancers, repairmen, technicians, handymen, etc. Mobile credit card readers also work well for businesses with temporary locations such as market stalls, street vendors, pop-up stores, etc.
4. Smart terminals
Smart terminals are what’s next in credit card readers. These machines are packed with functionalities making them far more than just payment processing systems.
Smart terminals support NFC payments from digital wallets like Apple Pay and Google Pay and have a multitude of apps for inventory management, analysis, tracking, etc. Some of these machines can even manage your entire loyalty program for you.
Businesses that want to integrate payment processes and streamline operations should choose smart terminals. They are best for small businesses that are a bit more mature and established.
5. Virtual terminals
Virtual terminals work entirely online. There are no physical scanners where a physical card can be swiped or inserted. Instead, a person logs onto the virtual terminal using a web browser and enters the customer’s credit card information manually. These payment terminals can be used on devices like laptops, computers, and mobile devices.
They are great for businesses that are completely online—for example eCommerce stores. Subscription-based businesses can also use virtual terminals for credit card payments.
What to Look for in a Credit Card Machine
There are several factors to consider when looking for a credit card machine.
- Compatibility with payment types – Make sure your credit card reader can accept magnetic stripe (magstripe) cards and EMV chip cards. Digital wallets are becoming increasingly popular so make sure the machine can process such payments too.
- Security features – Look for machines that are PCI-compliant and come with strong encryption and fraud protection features.
- Connectivity options – Depending on the needs and existing infrastructure of your business, choose a machine that is compatible with the right connectivity technologies like Ethernet, Bluetooth, or Wi-Fi.
- Ease of use – The simpler they are to use, the easier and quicker it is for you to train your staff to use these credit card machines. Also, you’ll be able to get these machines up and running much faster too.
- Cost considerations – The initial cost of purchasing the machines is not the only expense you’ll have to contend with. There are long-term fees, transaction fees, etc., so research thoroughly.
- Scalability – As your business grows, you need credit card machines that can keep up with the pace. Check if the machines can handle increases in sales volumes seamlessly.
Top Credit Card Machines for Small Businesses
Let’s take a look at some of the most popular credit card machines out there at the moment.
1. Square Terminal
The Square terminal is portable, affordable, and user-friendly. Hence, it works really well for pop-up and mobile shops. Payment processing is quick and these machines can handle chip and contactless payments. They also have in-built printers so you can print and hand over receipts on the go. Another advantage? You don’t need to sign long-term contracts.
2. Clover Flex
Although it is a handheld device, it comes packed with useful functionalities. Managing inventory, tracking customer information, and printing receipts can all be done with the Clover Flex apart from processing payments. It also supports a wide range of payment solutions, including mobile wallets. All these features make it perfect for restaurants and service-based businesses.
3. Verifone V200c
The Verifone V200c is a good choice for brick-and-mortar stores. It is a traditional countertop machine so you’ll need to make sure you have a reliable phone line or Ethernet connection. This machine supports various payment types and has robust security features. This is a really good choice for a store with a fixed location and steady in-store traffic.
Where to Purchase Credit Card Machines
You can either purchase a credit card machine directly from its manufacturer or a payment processor. You could also partner with merchant account providers or banks to obtain one of these machines.
Leasing credit card machines is generally not a good idea. Although upfront costs are lower, you may end up spending a lot more in the long run—greater than its cost. Most payment providers will offer terminals for free and you’ll have access to updates and upgrades as well.
Final Words
Choosing the right credit card machine is crucial for streamlining payments, improving the customer experience, and ensuring your business runs smoothly.
With options ranging from traditional terminals to smart devices, it’s essential to assess your business needs. Consider payment types, security, scalability, and budget before you take the plunge. Take the time to evaluate your options and pick the solution that aligns best with your current setup while supporting future growth.
Payment Depot offers a variety of credit card machines to suit your specific business needs. To learn more about our transparent interchange-plus pricing and plans, contact us today.
FAQs about Credit Card Machines
Q: What is a credit card machine, and why is it important for my business?
A credit card machine is a critical piece of hardware for businesses as it allows them to accept payments via credit cards. This increases the convenience and versatility of payment options for customers, thereby improving their shopping experience.
Q: What are the different types of credit card machines available in the market?
There are several types of credit card machines, such as traditional countertop terminals, mobile or wireless terminals, POS-integrated terminals, and virtual terminals. The type of machine best suited for your business depends on your business model and payment handling needs.
Q: What are the pros and cons of a traditional credit card terminal?
Traditional counter credit card terminals offer high levels of security and can process multiple types of payments, including credit cards, debit cards, and gift cards. However, they have low mobility, meaning they are best for businesses with a designated area for transaction processing. They also might be bulkier compared to other types of payment terminals.
Q: Are there any significant advantages of mobile credit card machines?
Mobile credit card machines offer increased mobility, allowing businesses to process payments on the go. This makes them ideal for businesses that operate in different locations, such as food trucks and on-site service providers. However, there may be heightened security concerns, particularly about wireless connectivity.
Q: Should I lease or purchase credit card machines for my business?
Purchasing credit card machines is generally more cost-effective in the long run than leasing them. Leasing can incur higher long-term costs, sometimes running into thousands of dollars over the course of the agreement. However, be advised that if you purchase a credit card machine and it becomes damaged, you may have to incur this higher initial purchase cost again.
Q: What are the payment processing capabilities of virtual terminals?
Virtual terminals are designed to process card-not-present transactions, making them ideal for businesses that take payments online or over the phone. While they eliminate the need for paper and additional hardware, they may not be efficient for businesses that process a large volume of face-to-face transactions.
Q: How can I choose the right credit card machine for my business?
The right credit card machine depends on a variety of factors, including your business operations, customer preferences, existing hardware or software, internet access, physical space, payment options offered, and budget constraints. It’s essential to consider these factors before making a decision. Speak with a Payment Depot representative to discuss your options.
Q: What are the key things to keep in mind while buying a credit card machine?
When buying a credit card machine, it’s crucial to understand your business needs, how your customers prefer to pay, and what kind of hardware or software you already have in place. Also, consider practical aspects like internet access, physical space for the terminal, the different payment options your business accepts, and your budget.
Q: What are the popular brands of credit card machines in the market?
Some of the popular brands include Square, SumUp, Clover, Payanywhere, PayPal Zettle, and Toast, among others. Each offers different products suited for varied business needs.
Q: What are the costs associated with credit card machines?
The costs associated with credit card machines can vary widely depending on the type of machine, brand, and additional features. Traditional credit card terminals can range from under $100 to over $350, POS-integrated solutions can range from $400 to over a thousand dollars. Renting should be considered a temporary solution and only when you can’t purchase upfront, but you may also want to get a protection plan if you purchase.
