If you have a brick-and-mortar business, you need to have the ability to process credit card transactions -- and that requires a credit card machine. A basic credit card machine has the ability to read the information stored on a credit card and send transaction information to a payment processor for approval. Depending on the complexity of the credit card reader, these are some of the features that you can expect:
- Built-in modem, Ethernet adapter or wireless adapter for transmitting transactions online
- Ability to read EMV cards -- or "smart" cards -- designed to reduce fraud
- Ability to send and receive Near-Field Communication (NFC) data and accept payment from mobile devices
- Other Point of Sale (POS) functions such as a cash drawer, bar code reader, touch screen and inventory management system
- Ability to interface with a cash register and/or receipt printer
- PIN pad for handling debit and EBT cards
How Much Does a Credit Card Machine Cost?
When looking at credit card machines for small business, the most important thing to remember is that you don't need to rent a credit card terminal from your payment processing company. Some payment processors charge exorbitant fees for renting credit card machines. If you're not careful, you could end up paying almost as much each month in rental fees as you would pay to simply buy a credit card terminal.
In general, you can expect to spend around $200 to buy a standalone credit card reader. If you need a full POS system with an integrated card reader, touch screen, printer and cash drawer, you should expect to spend $500 or more. However, a POS system does replace many of the individual components that you'd need to buy anyway.
Do I Need a Credit Card Machine That Supports Chip Cards?
You should definitely buy a credit card machine the supports smart chip or EMV cards. In addition to a credit card swiper on the side of the machine, a credit card terminal that supports EMV cards has an opening on the bottom that allows customers to "dip" their cards. The card reader interfaces with the card's embedded computer chip to create a secure code authenticating the transaction. For credit card purchases that take place in stores, the EMV chip helps to combat fraud. If your business doesn't support EMV cards, you could bear liability in the event of fraud.
Does a Credit Card Terminal Process Payments?
No. A credit card machine simply reads the information on a credit card and transmits it to a payment processor. You'll still need to sign up with a company to process and approve credit card transactions for you. In addition to the cost of the credit card machine itself, you can expect to pay a transaction fee each time a customer makes a purchase with a credit card. Usually, the fee is about 3 percent of the purchase amount.
What About Portable Credit Card Machines?
A portable credit card terminal has plenty of interesting uses. By connecting to your smartphone or tablet and utilizing its Internet connection, a portable credit card machine allows you to accept credit card payments anywhere. If you own a restaurant, for example, you could accept payments in real time while guests sit at their tables. If you attend trade shows, you could accept payments without a complicated POS system taking up space in your booth. If you have a brick-and-mortar store with a standard cash register, though, you may want a full POS system instead.