The shift towards a cashless society in the UK has seen many businesses investing in a card machine or “card reader” so as not to lose out on sales. Latest figures from UK Finance show that more than half (51%) of all payments in the UK were made using debit or credit cards in 2023, and 38% of all payments made were contactless (including mobile payments). Cash payments, on the other hand, only accounted for 12% of all payments, down from 14% in 2022.
One of the biggest factors you’ll need to consider when comparing card readers is their cost – these vary hugely and also depend on whether you rent or buy your machine. Here, we break down the different types of costs to be aware of and how to choose the right card machine for your business.
How much does a card machine cost?
How much a card machine costs depends on the provider and the type of card reader you need. It also depends on whether you pay for the device upfront or whether you pay a monthly fee to rent it.
If you buy your card reader outright, you could pay anywhere between £19 and £230, plus VAT, depending on the number of features it offers. If you rent your card machine, you could pay a monthly rental fee of between £10 and £25. On top of this, you’ll usually pay a range of card processing fees, which we cover in more detail below.
Some card reader providers tailor their prices to each particular business, which means you’ll need to get a quote to get a clearer idea of how much you’ll pay.
Typical fees that come with card readers
There are a number of fees you’ll need to consider when comparing card readers. These are:
Terminal costs. This could be a one-off upfront fee for buying or renting the terminal or a regular monthly cost.
Transaction costs. You’ll usually have to pay a percentage fee for each transaction carried out – typically between 1% and 3%, though Amex transaction fees are higher.
Merchant account costs. This applies to the bank account you’ll need to take card payments.
Merchant service charge. This is the fee banks charge to cover their costs in accepting credit card transactions and typically ranges between 0.2% and 0.3%.
Monthly minimum service charge. Some contracts require that you pay a minimum amount in transaction fees each month. If you don’t meet this requirement, you will still have to pay the minimum amount – usually between £10 and £20 a month.
Shipping costs. In some cases, you might have to pay a small fee to have the device sent out to you – usually up to £10.
Set-up fees. In a handful of cases, you might come across set-up fees of around £50 to £100.
Early exit fee. If you’re tied into a contract and want to leave early, you might have to pay a fee for doing so.
PCI compliance fee. All business owners who accept card payments must comply with the PCI DSS (Payment Card Industry Data Security Standard) requirements, as it ensures data is kept as secure as possible. Some providers charge a monthly or annual fee for this (often around £5 a month). Square complies with PCI standards, so you don’t have to validate your compliance or pay the fee.
Authorisation fees. Your chosen card processor is required to authorise the transaction with the issuing bank, and this incurs a charge of between 1p and 3p.
On top of these fees, you might also have to pay:
Refund fees. Some providers might charge a small fee each time a refund is carried out.
Chargeback fees. If a customer raises a dispute about a transaction – for example, if they paid for an item they didn’t receive – a chargeback might be carried out, and you’ll be charged a fee. You’ll also lose the transaction amount if the dispute is resolved in the buyer’s favour.
Foreign transaction fees. An additional fee is usually added to the transaction fee if you accept foreign cards where a currency is converted.
How much are card processing fees?
Card processing fees will vary depending on the provider, but you’ll often be looking at around 1.5% to 3.5%, although they can be as high as 6% when you add everything together, including authorisation fees.
Every time a card payment is made, you’ll pay a transaction fee, which will typically be less than 3% (it’s higher for Amex cards). If you’ve paid for your card reader upfront, this transaction fee is often fixed, although in-person payments are usually lower than those made online. Square, for example, charges 1.75% for Chip and PIN, swipe or contactless card payments but 2.5% for other payments.
If you’re renting your card reader, transaction fees often depend on your sales volume, contract length and business type – if you’re a higher-risk business, for example, fees will be higher.
Then there are merchant account fees to factor in. Card transactions need to be processed through a merchant account, and you’ll usually need to pay between £5 and £15 a month for this unless you’ve found a provider that doesn’t charge a fee.
On top of this, there is a merchant service charge, which is what banks charge to accept credit card transactions. The price ranges from 0.2% to 0.3%. There’s also an authorisation fee (where the card issuer authorises the payment) of around 1p to 3p for every transaction.
How to compare card machine fees
Card machine fees can be complex and there are a number of factors to consider. When comparing fees, it can help to ask yourself the following questions:
Would you prefer to pay a monthly cost or pay for the card reader upfront? Check how the costs compare for both.
Are you comfortable being tied into a long-term contract, or is there a risk that you’d need to get out of it early and pay a fee? If your card sales are unpredictable, it can be safer to opt for a card reader that doesn’t require you to be locked into a contract.
How do transaction fees compare? Check whether they are fixed or whether they will depend on the size of your business and volume of sales. Also check whether they differ depending on whether the transaction is carried out face to face or online.
Are there shipping or set-up fees? In many cases, you won’t need to pay these, but it’s important to check so you don’t get caught out.
Will you meet the minimum transaction fee requirement? Check what it is and how much you could be charged if you don’t meet it.
What cards do you want to accept? If you want to accept Amex payments or foreign cards, the fees will usually be higher.
Does the card machine provider comply with PCI standards? If so, you won’t have to pay an additional fee.
Bottom line
Card reader fees can be difficult to compare, so you’ll need to read the small print carefully to see what will work best for your business. Consider whether you want to rent or buy your card reader, whether you want to be tied into a contract and whether you’re happy to accept foreign card payments or Amex cards, as these will all affect how much you pay overall.
Frequently asked questions
A transaction fee is the amount charged each time a card transaction is carried out. It can vary between 1% and 3%.
Potentially. If you're tied into a contract and want to leave it early, you might have to pay a fee. This can be expensive as it's often the equivalent of paying out the remaining charges of the contract period.
Yes, card readers usually charge a higher transaction fee if you accept American Express (Amex) cards – this could be 1% to 2% more.
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To make sure you get accurate and helpful information, this guide has been edited by Liz Edwards as part of our fact-checking process.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
In this guide, we compare the most popular card reader products from SumUp and Barclaycard.
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