fbpx

Over £150m in payments processed. Sign up in 10 minutes.

Card Machine
|

Card machine cost in the UK

5 min read
Discover the cost of card machines. Explore fee structures, rental options, and find the most cost-effective solution for your business.

In this article we’ll cover:

When venturing into the realm of card payments, one of the foremost questions that arises is the cost of acquiring a card machine. In this comprehensive guide, we’ll break down the expenses associated with card machines, helping you navigate the complexities and find the ideal solution for your business.

Rent vs. Buy: Making the decision

The first step in understanding card machine costs is determining whether to rent or purchase one. Each option has its own set of advantages and disadvantages.

Pros of Buying a Card Machine:

  • Potential long-term cost savings, with no recurring rental fees.
  • Freedom from contract obligations.
  • Full ownership and control over the card machine.
  • Flexibility to choose different payment processors or service providers.

Cons of Buying a Card Machine:

  • Requires a substantial upfront investment, which may be challenging for small businesses.
  • Responsibility for maintenance and repair costs beyond the warranty period.
  • Costs associated with upgrading the machine when technology evolves.

Pros of Renting a Card Machine:

  • Lower upfront costs, making it more accessible for small businesses.
  • Rental packages may include maintenance and offer free or discounted upgrades.
  • Increased flexibility with the option to switch machine models or providers.
  • Access to ongoing support and service from the provider.

Cons of Renting a Card Machine:

  • Long-term rental costs may exceed the price of buying outright.
  • Dependency on the provider, with potential risks if they go out of business.
  • Rental agreements often come with contractual obligations.

Cost of Buying a Card Machine:

The price of purchasing a card machine varies based on factors such as the brand, features, and machine type. Mobile card machines, which utilize accompanying apps, typically range from £15 to £40 plus VAT. Standalone machines, using SIM cards or wireless technology, span the £100 to £200 range. Traditional countertop and portable card machines are less commonly sold outright, with prices ranging from £200 to £800.

Additionally, buying a card machine incurs several accompanying fees, including transaction fees based on a percentage of each payment processed. Future costs may involve upgrade and maintenance expenses.

Cost of Renting a Card Machine:

Renting a card machine typically ranges from £10 to £30 per month, with some providers requiring minimum contract terms, often around 12 months, though discounts may apply for longer commitments. Yetipay, for example, offers a flexible 30-day rolling contract, ensuring freedom from long-term ties.

Rental costs also depend on the type of card machine chosen. Countertop machines generally cost less than portable ones, while mobile card machines with Wi-Fi or SIM card capabilities tend to be slightly pricier. Most providers include a data allowance in the monthly charge. Yetipay's card machines start at £29.95 per device per month, with premium options available at an additional monthly cost.

As with purchasing, renting a card machine involves other fees, including transaction fees, one-time setup charges, and model upgrade costs. Yetipay aims to match existing processing fees where possible.

Understanding fee structures for card machines:

Understanding Fee Structures for Card Machines:

Regardless of whether you buy or rent a card machine, you will encounter fees related to processing each customer payment. These fees vary based on factors such as transaction volume, contract duration, business category, and the types of payment cards accepted. Premium cards like American Express or international cards typically incur higher fees.

There are three primary pricing structures for credit card processing fees:

  1. Interchange Fees: These fees are set by card networks (e.g., Visa and Mastercard) and are paid for each transaction by the acquiring bank (merchant's bank) to the card-issuing bank (customer's bank). Interchange fees consist of both a flat fee and a percentage of the transaction amount, determined by various factors. While offering transparency, predicting costs can be challenging due to rate variability.
  2. Blended Fees: Blended fees encompass a single, simplified rate that combines interchange fees, card processor fees, and other expenses. The processor averages the costs of all transactions, resulting in a single rate. Although this simplifies cost consideration and budgeting, it may obscure precise transaction expenses.
  3. Flat Rate Fees: Flat rate fees impose a fixed percentage or amount on each transaction, regardless of card type or transaction details. This fee structure is straightforward, as businesses pay the same rate for every transaction. It suits companies with consistent transaction volumes but may not be cost-effective for those handling numerous transactions or varying transaction sizes.

Additional costs to run a card machine:

In addition to renting or buying a card machine and transaction fees imposed by your payment processor, other costs may apply, including setup fees, postage charges, PCI compliance fees, and early account cancellation penalties. Some fees are one-time, while others are recurring, either monthly or usage-based.

Merchant accounts incur costs, typically ranging from 0.2% to 0.3% to accept credit cards. Some provider contracts include a mandatory monthly minimum in transaction fees, typically £10 to £20 per month. Businesses accepting credit or debit card payments must adhere to the PCI DSS (Payment Card Industry Data Security Standard), which may entail a monthly or yearly fee, often around £5 per month.

Finding the most cost-effective card machine for your business:

Determining the most cost-effective card machine for your business depends on various factors, including transaction volume, contractual terms, vendor quotations, and your business's specific needs. While renting a card machine is generally more cost-effective for businesses than purchasing an inexpensive card reader outright due to significant differences in transaction fees, assessing the most suitable option involves careful consideration.

Evaluate the following to make an informed decision:

  • Transaction Volume: If your business processes a high volume of transactions, prioritize vendors offering competitive transaction rates.
  • Contractual Terms: Scrutinize contract terms, accounting for monthly minimums, cancellation fees, and other potential costs.
  • Vendors: Collect quotes from multiple providers, considering upfront costs, recurring expenses, transaction fees, and additional service offerings.
  • Business Needs: Tailor your choice to your business model, mobility requirements, accepted payment types, and essential day-to-day