For Business Owners

What is the best card machine for small businesses?

Heather Young
business-technology|Card linking technology in action.|Card linking technology in action.|An infographic asking "what is the best card machine for small business?"|cashback card reader for small business from paymentsense|Swipii for Business cashback marketing tool blog banner (1)|cashback card machines for small businesses header|card-machine-in-action|card-payment-machine|credit-cards

The use of card machines for small businesses is more important than ever as the shift away from cash grows with the pandemic. Since the beginning of lockdown, the use of ATMs has dropped by 62% year on year according to the Financial Times and businesses are needing to quickly adapt to facilitate card payments. Before COVID-19 played a pivotal part in this growing shift, we worked hard to ensure Swipii was at the forefront of card linking technology and provided a product that works for local businesses. That said, it can be difficult for an independent business owner to know exactly which card payment technology will work the best for their customers and their own systems. We wanted to give a bit of insight into the world of card readers, and let you know which of these platforms work best with a listing on the Swipii cashback app.

Which card machine for my small business?

Trying to decide what the best card machine for your small business could be? Businesses up and down the UK are now heavily reliant on card readers, as the number of customers using card payments continues to grow rapidly. A recent study by Mastercard showed that there was a 40% increase in the use of contactless payments since January 2020 (Source: CrowdfundInsider).Prior to the pandemic, it was this emerging trend which prompted the reincarnation of the Swipii product in 2018 with advanced card linking technology, and has since led to small and local businesses across the country looking for answers on the card readers they should be investing in. Which type of card machine does your small business need? Already got a card machine for your small business? Could you be getting a better deal?

An infographic asking "what is the best card machine for small business?"

Source: Merchant SumoThe card machines now used by small businesses are often referred to as PDQ machines, or “Process Data Quickly” machines. They come with a range of capabilities depending on the nature of your business, your budget and even your space available. One of the most common types of card reader is the countertop card machine, which is used by shops, delis and various other businesses as an easy way for customers to pay by card at the point of sale or till. Portable card machines for small businesses are also growing in popularity, for example in large restaurants where each server will have their own card reader which will connect to the WiFi in order to process payments. Lastly, some businesses may even choose a PDQ card machine for their business which runs via a mobile or GPRS connection. For pop-up events or festival-like situations, this can be the best and most efficient option as it allows your card readers to run effectively without the need for a WiFi hotspot or another solution.Before you can start looking at card providers, you need to first look at how you are going to use the card machine in your small business, and how you might connect the machine to your main payment processing systems.


Who are the main card reader providers?

In the UK, there are so many different payment processing companies, it can be difficult to compare card readers. It’s worth looking at the different types of card reader providers before moving on, as it can give you a good deal of insight into which may be the best card reader for a small business like yours.

Merchant Acquirers

Merchant Acquirers are one of the main types of payment processing companies which you will find in the UK market. These organisations will provide you with a merchant account, and hold funds between the customer using their card and this amount being deposited in your business bank account. These Merchant Acquirers will work directly with Visa and Mastercard (as well as other card networks) in order to make sure your card machines for small business will work effectively for any customer’s card. Even if you sign up to one of the other payment processing companies that will follow in the coming sections, all payments will go through a Merchant Acquirer at some point- so why not go straight to the source? When a business wants to process credit and debit card transactions from all major banks, they need to sign a contract with the acquiring banks. Once that’s done, the Acquirer can then authorise transactions and connect with the banks issuing your customer’s funds on your business’ behalf. In simpler terms, the Merchant Acquirer does all of the communicating and processing from the initial card tap to the cash ending up in your business account. Merchant Acquirers include: Global Payments, Barclays, First Data and WorldPay.


Independent Sales Organisations (ISOs)

Independent Sales Organisations (ISOs) are basically third-party businesses which sign up new merchants on behalf of a Merchant Acquirer. They don’t usually run any of their own payment processing technology but instead are at the forefront of recruiting and supporting new businesses who would like to accept card payments. Although it may seem like being a third-party organisation may make an ISO more expensive for your business, it is usually the opposite. This works out for everyone involved. An ISO recruits a large number of merchants (or small businesses) and uses the group to leverage discounted rates from the Merchant Acquirer. In almost all cases, this discount is passed down to the merchant. Independent Sales Organisations include: Payzone, Bleep, PaymentPlus and Paymentsense.

Payment Facilitators

When we compare card machines for small businesses, many people first think of one of the companies which come under the umbrella of “payment facilitators” (or PayFacs). These companies are also known as third-party payment services providers (Source: Bambora). Traditionally, each business in a street would be allocated their own Merchant Identification number, also known as a MID. This allows the banks and payment processing companies to identify the transactions and associate them with specific merchants. With PayFacs, a number of different businesses are grouped together under one overarching MID, which allows the organisation to process sign-ups more quickly and streamline the underwriting process.However, PayFacs are limited, especially for local businesses who experience high turnover. At a certain point, it makes considerably more sense to process your small business card payments with a dedicated MID and merchant account, possibly from a Merchant Acquirer or an ISO. Payment Facilitators include: iZettle, SumUp, Square, PayPal Here.This is just a short glimpse into the world of payment processing, so make sure to do all the research you can before choosing one of these options to stick to. There are a few places you can kick off your research, including Expert Market and Startups.


Which card readers will work with Swipii?

If you take a look at the different card machine providers we have mentioned above- merchant acquirers, independent sales organisations and payment facilitators- you will see that the way they organise and process payments for small businesses varies immensely. For the Swipii app to work for local businesses, we need to be able to identify the business’ individual card payments, and for this, we need the individual MID that we mentioned earlier. As the payment facilitators above like iZettle and SumUp group merchants under one “master MID” (Source: StoreKit), this allows them to streamline their processes. However, at the moment only Mastercard can identify individual businesses that use a shared MID at this time. The team at Visa are currently working on solutions that would enable them to do this too, although this is not expected in the next 6 months or so. We will be doing everything we can to get Swipii to work with all of these providers as soon as we’re able.  Got any questions about whether your card machines will work with a Swipii loyalty program? Chat with a member of the team

How much do card machines cost?

The actual price of a card reader for a business will vary. Of course, if you’re buying in bulk that’s always going to result in a lower cost. The actual capabilities of each type of card machine will also affect the end price. Once you have chosen the “PDQ” you want to go for, then you will be able to find the best deal for you in each bracket. Generally, prices for card machines for small businesses can range anywhere from around £30 up to £300 (Source: Startups) for seriously advanced card readers- there will always be exceptions on either end of this price scale, but most card machines will fall into these brackets. Remember though, many of the higher-priced ranges will offer more freedom or flexibility. We recommend always doing a bit of research before you set a fixed budget for tech like this, but at least now you know what kind of range to be looking in! You can always talk to companies like Koicoms who can give advice on a wide range of different merchant services, from credit card processing to different payment terminals.


Million dollar question, what is the best card reader to buy?

Hopefully, as your reach this point in the article, you have a better idea of what will work for your business. Of course, we’d always recommend making sure you sort out a card machine that’s going to enable you to get set up with a Swipii loyalty program, but ultimately the choice is yours!

Enjoy reading this? Check out some more...

Who should businesses reward? New shoppers or loyal customers?

Why offering cashback could be good for business


Want to find out how the Swipii cashback app could help you increase customer retention, and increase your revenue? Check out Swipii for Business now.Let us know if you have any insights on card machines for small businesses that you think may help others.