Everything you need to know about POS card readersposhunter.com | last updated: 8. June 2020
What are card readers?
Point of Sale card readers are the modern era’s terminal payment systems.
They are lighter, more compact, portable, fast and economical as well as fitting the bill as online, cloud-based systems.
And while cash is still king in the UK, this is only just still the case, with card payments closing in on parity year on year.
It would appear that it’s only a matter of time before cashless societies become the present rather than the future and, bearing that in mind, there has never been a better time to enter the world of card readers.
What are the benefits?
As a trader, cashless payment is a plus for several reasons.
Firstly, offering a wider variety of payment methods increases your likelihood of making sales. It’s also more convenient for the customer to be able to pay by card, and it meets modern consumer expectations, thus improving customer satisfaction.
And on the flip side, there’s convenience for you as a business, because more card payments equal less cash on site, so a lower risk and less admin required to keep a reasonable float.
Who are the main providers?
The main vendors in the UK are specialist POS companies. They offer low prices and system setups that are geared towards businesses that are most likely to use them; retail, hospitality, leisure and food and drink establishments. The five most used card readers are:
There are also banks that offer business card readers as part of their service, such as Barclaycard.
How much does it cost to accept card payments?
You can break down the cost of using a POS card reader into four sections:
- Up-front costs
- The card reader itself
- Monthly fees
- Transaction fees
While it was previously the case that these prices were difficult to unpack and discern, making it tricky for businesses to forecast expenditure, with the specialist payment providers, costs are simple, transparent and affordable for pretty much any size of enterprise.
Take Zettle as an example. The card reader itself costs £29 and where transaction fees used to be on a sliding scale depending on sales per month, transactions are now charged at a flat 1.75%. There are no up-front costs other than the card reader, and no ongoing monthly fees unless you choose their premium service, which is £29 per month.
Meanwhile, SumUp, which is aimed specifically at smaller businesses, charges £19 for its card reader and 1.69% for transactions. Again, there are no setup or monthly fees.
Which cards do card readers typically accept?
The main vendors are focused on offering choice. Readers will accept Visa, Mastercard, Maestro, American Express, Apple Pay, Google Pay and Samsung Pay. In the UK, this covers over 90% of payment methods.
What types of card readers are there?
In terms of card reader type, your options are wireless or integrated (wired). Wired systems are permanently integrated with a cash register, and are often seen in retail outlets and shops.
But more modern POS card readers are wireless, either connecting via Bluetooth or packet-based wireless communication (GPRS). Bluetooth readers generally connect to an iOS / Android compatible app on a smartphone or tablet and are portable for at-table service.
Meanwhile, GPRS card readers are used in conjunction with radio systems such as taxi firms or trade fairs.
What is NFC?
NFC stands for Near Field Communication. This is how contactless works – by proximity. You can hold your card near the NFC logo on the card reader and the payment will register. In the UK, this is limited to payments of up to £30. The five main vendors all have NFC-enabled card readers as standard.
What’s better – PIN, signatures or NFC?
For the customer, the safest method of payment is using a PIN as NFC can be used by anyone in possession of a card and retailers seldom check that signatures match those on the reverse of a customer’s card.
This is the main reason that NFC payment is limited at £30 – to reduce risk. It is, however, the quickest and most convenient method of payment, which makes it popular amongst modern customers.
Signature payment is copiable, albeit less so than NFC, but the main risk is for the seller, as it is not a guarantee that funds will be collected – a customer could get in touch with the bank and block payment afterwards by reporting their card stolen.
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