How to Select the Right Credit Card Processing Equipment for Your Business

How to Select the Right Credit Card Processing Equipment for Your Business

Whether you’re a new entrepreneur looking to set up your credit card processing equipment for the first time, or a seasoned business owner shopping around for a new solution, having the right credit card machine is critical. The hardware market is saturated with a large range of devices that, more or less, have the same features. Identifying the different nuances of these devices and understanding the best one for your business can be a daunting task.

Aside from actually enabling you to accept credit cards, the right machine can streamline your operations, improve the customer experience, and even help grow your business. According to a 2023 report by the Federal Reserve, 60% of all payments in 2022 were made via cards—be it debit, credit, or prepaid cards. Another study by Fiserv shows that shoppers preferred paying with their credit cards for both daily planned (49%) and unplanned (~40%) purchases. Essentially, businesses can no longer ignore card payments.

Credit Card Processing Equipment_Card Payments Market Share_Infographic

When it comes to credit card processing equipment, typically larger machines cost more. Businesses also need to shell out more if they want additional, specialized features.

Credit card processing providers and credit card networks make money by charging businesses a fee for each credit card transaction. For a small business, managing the cost of accepting credit card payments is essential to maximize profits. Hence, finding the best credit card processing equipment for the lowest price is crucial for them.

Any credit card processor you choose must be PCI compliant. Credit card readers for in-person payments should be able to accept EMV chip card payments, for instance, as magnetic stripe (or magstripe) readers are being phased out for the higher levels of security offered by chip cards. From 2023 onwards, all credit card machines support EMV payments.

In this post, we’ll go over the different types of credit machines in the market. You’ll gain an understanding of what each machine is about, what the costs are, and which type is best suited for your business.

There are various types of credit card machines out there, and the “right” choice depends on the nature of your business, the processes you have, and your technology requirements, among other things.

Here’s what you need to know.

Credit Card Processing Equipment_Consumer Preferences_Infographic

Traditional/Countertop Credit Card Machines

A traditional or countertop credit card terminal is one of the most commonly used credit card machines today. It requires a physical connection to your phone or the internet in order to process payments. As you may have guessed, a countertop terminal typically sits on a desk or countertop and doesn’t need to be moved or transported often.

Countertop credit card processing equipment usually has a PIN pad allowing for PIN input. Some even accept card-not-present transactions that allow businesses to enter a customer’s credit card number to complete the payment even if they don’t have their physical credit card with them. 

If you can afford it, try to get countertop credit card processing equipment that supports NFC payments. As per a survey by ACI Worldview, the adoption rate of mobile wallets (like Apple Pay or Google Pay) reached a peak of 51% in 2021. The same report also projects that electronic transactions will make up more than 90% of all transactions by 2024.

Pros and Cons of Traditional Credit Card Processing Equipment

Pro: Ability to process multiple payment types.

The biggest advantage of traditional credit card processing equipment? They have the ability to process multiple payment types, including credit and debit cards, as well as gift cards.

You can also process “card not present” transactions using countertop terminals by manually keying in the customer’s payment details. This really helps when customers have accidentally forgotten to carry their credit cards or if their cards have become damaged. If your countertop terminal accepts such payments, you can even process a few orders made over the phone or the internet.

Pro: High levels of security

As these devices sit on a countertop and are hardwired, countertop credit card machines tend to be more secure. You can easily equip them with extra equipment like PIN terminals to further prevent fraud or breaches.

Con: Limited mobility

Traditional or countertop solutions have limited mobility, so expect to be stationed in one area of your store or workspace when dealing with payments. If your business has brick-and-mortar stores that handle a substantial volume of credit card payments, purchasing countertop credit card processing equipment may be a worthwhile investment.

Con: Bulky

Countertop terminals tend to be bigger and heavier, so setting them up or moving your equipment may take time and effort. The fact that these terminals require a hardwired internet or phone connection adds to their bulk and makes them clumsier to use.

Businesses That Benefit Most From Countertop Credit Card Processing Equipment

For the reasons mentioned above, countertop machines are best suited for businesses that have a designated area for processing transactions. These may include retail stores with a checkout counter or cash wrap, restaurants, salons, as well as medical and dental offices.

Businesses that take payments over the phone—such as B2B establishments—would also benefit from traditional credit card machines.

How Much Do Traditional or Countertop Credit Card Machines Cost?

Prices will vary depending on the machine, model, and features, but costs for traditional payment terminals can range from just under $100 to $350 and above.

Examples of Traditional Payment Terminals

Common examples of traditional credit card processing equipment include:

Mobile/Wireless Credit Card Machines

Need to be on the go when processing payments? Then a mobile or wireless credit card machine could be a better option for you. Unlike the traditional types, mobile payment terminals don’t require a physical connection to your internet or landline. Instead, they can connect wirelessly via WiFi or Bluetooth.

Place mobile credit card processing equipment on a countertop and it makes for a great alternative to a traditional countertop credit card terminal. For a small business that processes payments at various physical locations such as in-store or outdoor events, a few mobile credit card machines can suffice for all their credit card transactions. These machines are usually far smaller than traditional terminals making them easy to pack up and carry. 

Mobile credit card machines vary in capabilities as well. Some are as simple as a little mobile card reader meant just for credit card processing that plugs into your phone’s headphone jack, while others are standalone mobile POS iPad systems complete with WiFi connectivity and touchscreen functionality.

Pros and Cons of Wireless Credit Card Processing Equipment

Pro: Freedom and mobility

The main benefit here is obvious. Wireless terminals enable you to process payments on the go. So whether you’re operating a mobile business or you’d like to take payments from anywhere in your store, a wireless terminal will allow you to do so.

As wireless terminals are built for portability, they take up less space when used as countertop credit card processing equipment. These devices also tend to be sleek and compact, giving them a modern look.

Con: *Some* security concerns

There are some security concerns, particularly around wireless connectivity, but they can be avoided by connecting to a private network and adhering to data security best practices. There is a possibility of wireless communications being intercepted. However, merchants can secure credit card transactions by opting for robust security features that are often offered by credit card processing companies.

Businesses That Benefit Most From Wireless/Mobile Credit Card Terminals

Mobile or wireless credit card machines are best suited for merchants who take payments on the move. Food trucks and carts are all the rage these days and wireless terminals are perfect for such establishments. Other prime examples include independent contractors, plumbers, handymen, and any merchants who make house calls. Businesses attending events can also benefit from wireless terminals.

How Much Do Mobile/Wireless Credit Card Machines Cost?

Prices for mobile and wireless credit card processing equipment are similar (albeit slightly higher) than traditional ones. Prices range from $100+ to $350+.

Examples of Mobile/Wireless Payment Terminals

Common examples of mobile and wireless credit card machines include:

Credit Card Machines for Integrated Point-of-Sale

You could also process payments through your point-of-sale system, which usually means that your POS hardware and software are bundled together.

Pros and Cons of Integrated POS

Pro: Faster checkout

The process of accepting card payments is relatively more efficient if your POS is integrated with your payment processor. This is because an integrated system means that payment information smoothly flows from your processor to your point of sale software, and you don’t need to manually key in the amounts. This, in turn, reduces human error and makes tasks like transaction reconciliation much easier.

Con: Limited choices when it comes to providers

The downside is you don’t get to choose your payment processor, so your rates and the terms of your agreement will be decided by your POS. As such, if another payment processor offers a better rate, then it might be difficult (or impossible) to switch.

Businesses That Benefit Most From Integrated POS Machines

POS-integrated terminals are quite flexible, and providers often have solutions for various types of businesses. As such, companies that are happy with their point-of-sale solutions and/or credit card processors should look into POS-integrated machines. 

If you already have a great relationship with your payment vendors, consider looking into their point-of-sale offerings as doing so can make your business more efficient.

How Much Do POS-Integrated Terminals Cost?

These solutions are usually more expensive because you’re also paying for the POS system. Prices range from $400 to well over a thousand dollars.

Examples of POS-Integrated Machines

Here are some of the highest-rated POS-integrated payment terminals:

Credit Card Machines | Virtual terminals

Virtual terminals are just that—virtual. They’re secure web pages that allow you to enter payment information into the application. The terminal then processes the payment electronically.

Pros and Cons of Virtual Terminals

Pro: Ability to process card-not-present transactions

Virtual terminals come in handy because they enable card-not-present transactions. Credit card details are entered manually, so you can take payments online or over the phone.

Pro: Reduce the need for paper and additional hardware

Virtual terminals also reduce paper waste. Not to mention, the upfront costs are lower because the hardware isn’t required.

Pro: Potentially lower rates for B2B

Virtual terminals are also better for B2B merchants because they can enter more information to get lower rates.

Con: Inefficient for in-person payments

As for their disadvantages? Virtual terminals can be inefficient for businesses that process face-to-face transactions. For example, if a retail store is using a virtual terminal instead of a physical credit card machine, then the retailer would have to manually enter the shopper’s credit card number instead of swiping it. Additionally, virtual terminals cannot accept cash, checks, or debit cards.

Businesses That Benefit Most From Virtual Terminals

Virtual credit card machines are suited for merchants who ring up sales remotely. Online businesses, eCommerce sites, freelancers, medical billing companies, and certain B2B merchants would benefit the most from these terminals since these merchants need to connect remotely to credit card processing companies.

How Much Do Virtual Terminals Cost?

Many virtual terminals charge a subscription fee or percentage rate, depending on the agreement. Do note that processing costs are typically higher for card-not-present transactions because they’re more susceptible to fraud.

Examples of Virtual Terminals

  • Authorize.net
  • Paytrace Virtual Terminal
  • NMI

Should You Lease a Credit Card Terminal? (Spoiler Alert: No, You Shouldn’t.)

The short, definitive answer to this question is NO.

You should never lease your credit card machines because doing so will cost you a lot more money in the long run. If a provider or agent is encouraging you to lease your terminals, they’re not looking out for your best interests.

In fact, some companies that are pushing businesses to lease their equipment are downright scammers, as you’ll discover in this news clip.

Why Leasing Your Credit Card Machines Is a Bad Idea

Simply put, leasing a credit card machine costs way more money. Terminal leases can cost around $30 to $100 per month over 2 to 4 years, which can add up to thousands of dollars over the course of the agreement. Meanwhile, you can purchase a credit card machine upfront for a few hundred dollars (maybe $400 and up if your machine is on the high end.)

Think of it this way: Would you pay $4800 for a $300 terminal? One merchant that we spoke to did exactly that. She had a $99/mo lease for 48 months on a terminal that could have been purchased for under $300.

Make no mistake: Leasing your credit card machine is a terrible idea and you should run from anyone trying to convince you otherwise.

Misleading Claims and Myths Around Credit Card Equipment Leasing

Speaking of which, what exactly do leasing companies tell merchants when convincing them to lease the equipment? Here are some of the claims and myths to watch out for:

No upfront fees – This is an incredibly weak and misleading argument.  As we’ve already established, leasing your terminals is a more expensive route (literally thousands of dollars more) compared to buying them upfront. So while it’s true that you have no upfront costs from leasing, you’re still paying unnecessarily higher fees in the long run.

The costs are tax deductible – Yes, you can certainly deduct your leasing fees for tax purposes, but you can do the same thing for the costs of buying your equipment.

Your equipment is insured – While your leasing company may insure your credit card terminals, equipment insurance may not be as big of an issue as you might think. Credit card machines these days are quite durable and can work perfectly for years, without hiccups.

That said, if you do run into damages and malfunctions, your merchant account provider may be able to cover these expenses if you bought the equipment directly from them. If this isn’t an option, then you’ll find that the cost of fixing or replacing your credit card terminals is still lower compared to the long-term costs of leasing them.

Your credit card equipment may be obsolete in a few years – A leasing company may argue that since technology is moving at such a fast pace, it isn’t a good idea to buy a machine that would be obsolete in a few years.

This simply isn’t the case. Credit card terminals can keep up with technology and last for several years.

Besides, even if you had to replace your terminal every 2 to 4 years, you still end up saving money compared to leasing.

What to Do Instead

Now that we’ve covered the myths and misconceptions around credit card machine leases, let’s discuss your alternatives. Here are some of the things you can do instead of leasing your credit card terminals.

Reprogram your existing equipment – If you’re switching to a new payment processor and already have existing credit card terminals, you may be able to rework them for your new provider. At Payment Depot, for example, we can help you reprogram your credit card equipment for free.

Purchase new credit card machines – Spending $300 on a terminal can be a tough call, particularly if you’re just starting out. But remember that buying is a far cheaper option for the long term. The immediate savings are not worth the higher fees over the lifetime of your account.

Rent the equipment – This isn’t ideal, but if you truly cannot cover the cost of buying new credit card machines, then you can rent them instead. Just make sure that your agreement doesn’t come with any long-term commitments and that it can be canceled at any time with zero penalties.

Bear in mind that you may need to cover insurance costs for your rental, so factor in those fees as well.

Note that renting should be a temporary fix, and you should opt to buy your equipment once you have the cash flow or resources to do so.

What About “Free” Equipment?

We know that some payment processing companies offer “free” equipment, and while this option looks attractive, you need to tread carefully.

Companies that offer free equipment typically make up for that cost many times over through processing fees. In other words, you eliminate upfront costs, but end up paying more over time.

If you’re tempted to sign up with a credit card processor because of the free equipment, take a close look at your agreement and calculate your processing rates. There’s a good chance that you’ll shell out higher-than-necessary costs for credit card processing.

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How to Select the Right Credit Card Machine for Your Business

There’s no single path toward choosing the right credit card machine. To determine the best credit card processor for your business, you need to factor in things like:

Your Business Activities and Procedures

Think about how things work in your business when it comes to payment processing. If you’re on the go and constantly sell on the road, for example, then a mobile or portable terminal is ideal. If you regularly have to take payments over the phone, then you’ll need a virtual terminal or a traditional machine that can support card-not-present transactions.

Additionally, you’ll have to consider how your customers prefer paying when they pay in person. Do they generally prefer contactless payment methods that operate using near-field communication (NFC) technology like Apple Pay?

Your Existing Technology

If you have existing hardware and software in place, then you’ll need to consider those technologies when choosing a credit card machine—unless you’re willing to start from scratch.

For instance, if you’re happy with your current POS system, then be sure to ask about the credit card machines that work best with their software. If you already have a payment provider in mind, then inquire about the hardware that your processor can support.

Speaking of existing technologies, if you already have a payment terminal and need to switch payment processors, you may not have to purchase new equipment. A lot of merchant service providers can reprogram your credit card machines to work with their solutions. Some payment processors—including Payment Depot—will even do it for free. So if you’re shopping for a credit card processor and you have existing terminals in place, don’t forget to ask about reprogramming.

Finally, you need to consider your internet access. Do you have dependable Wi-Fi access? Do you have to plug in with an ethernet cable? Do you need to take credit card payments on the go in locations with no internet connection? Your internet access will play a large role in what credit card readers you can use.

Your Location

Do you have enough space for a dedicated “payments area” or are you better off ringing up sales on the spot? Do you operate in a high-traffic location that requires more mobility? Do you frequently sell in a mobile fashion, such as at pop-up shops or in customers’ homes? Such questions will help you decide whether you need a mobile credit card machine, a  desktop terminal, or even a POS-integrated one.

The Payment Types You Need to Accept

While all credit card machines can accept… well, credit cards, not all terminals can process all the available payment options. For example, virtual terminals cannot take cash and debit cards. Need to process EMV cards, chip cards, or mobile wallets? Then choose a credit card machine that has those capabilities.

Your Budget

Credit card terminals come in various price points, and you want to make sure that you choose a device that fits your budget. One key piece of advice when it comes to budgeting for your credit card machine is to stay away from leasing. Leasing your terminals can cost $30 to $100 a month over 2 to 4 years, which adds up to thousands of dollars over time. As we pointed out earlier in the post, credit card machines cost a fraction of that (a few hundred dollars for the most part). 

For those on a very tight budget or time frame, small card readers can come in well under $100. (It should be noted such card readers do usually require you to utilize the brand’s credit card processing software for as long as you use the small card reader.) Such card readers can often be purchased at places like Best Buy so that your business could take credit card payments tomorrow at a farmer’s market stand, for instance.

As such, when you lease your payment terminals you’re essentially paying thousands of dollars for a device that’s worth a few hundred (and you don’t even get to keep the machine).

What should you do instead? If you’re unable to purchase a credit card machine upfront, consider short-term rentals instead of leasing. But make sure you save up enough money for a new terminal ASAP to avoid shelling out unnecessary costs. And if you already have credit card terminals, see if you can reprogram them to avoid buying new ones.

Final Words

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These days, the ability to accept credit cards is no longer “nice to have”—it’s practically table stakes in just about every business sector, even very small businesses. That’s why it’s essential that you arm your business with a terminal or machine that allows you to ring up sales efficiently and provide the best customer experience possible.

Good luck and we hope you find the right credit card machine for your business. If you need more insights into credit card machines and payments, feel free to get in touch!


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.


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