An Easy Guide to Credit Card Machines: How to Select the Right One for Your Small Business

Did you know that only 19% of consumers pay in cash, making it one of the least preferred modes of payment? While card payments are still widely used, contactless payments and mobile wallets continue to grow in popularity with each passing day.

So while it might not seem like much, the type of credit card machine you use to accept payments can have a huge impact on your business. A slow and ineffective one can create poor checkout experiences for your customers, while a modern and robust credit card terminal allows you to serve shoppers better and even streamline payments and reporting in your business.

Modern credit card machines come in a variety of forms—offering simple credit card processing features at one end of the spectrum to full-blown POS system functionality at the other. To get the most out of your payment processing, you need to choose a credit card machine that aligns with your business needs.

In this guide, we’ll take a look at the ins and outs of credit card machines and what you should look for when choosing one for your business. Let’s get started.

What Does a Credit Card Machine Do?

In essence, credit card machines can accept debit and credit card payments from customers and transfer them to your merchant account. These machines are designed to send data to the payment processor over Ethernet, Wi-Fi, or a telephone line.

When a customer makes a payment, funds are usually transferred from their bank account to your business’s merchant account. Sometimes, the credit card processor can also use a merchant account to hold your funds and deposit them directly to your checking account.

How Do Credit Card Terminals Work?

Depending on the types of payments you support, a credit card machine can accept payments in a variety of different methods. For example, magstripe cards (in which cardholder data is stored on magnetic stripes) are read by swiping them on a credit card terminal.

Some terminals use the chip-and-pin method in which cardholders need to insert their card and enter a pin. This offers greater security and is EMV (Eurocard, Mastercard, and Visa) compliant. Most credit card machines today include a traditional card swiper as well as an EMV chip card reader.

Credit card machines with NFC (near field communication) transmitters can accept contactless payments. Customers simply need to tap their credit cards or mobile phones (for Google Pay or Apple Pay transactions) against the credit card terminal and the NFC transmitter sends information to it wirelessly. Contactless payments are EMV compliant as well.

Some credit card machines also allow keyed entry for card-not-present transactions. These machines have built-in keypads that allow you to manually enter credit card information collected from customers over the phone or by email.

Different Types of Credit Card Machines

Now that we’ve covered what a credit card machine is used for and how it works, let’s take a look at the various types of credit card terminals available today. Each of them has its strengths. You must choose one that aligns with your business and customer needs.

1. Traditional countertop EMV credit card machines

Countertop terminals are the ones you’d most commonly see in retail stores. They typically sit on a desk or countertop and require an ethernet or phone connection to process payments. They can process many different payment methods including credit, debit, and gift cards. You can also use them to process card-not-present transactions or equip them with pin pads for greater security.

Benefits: Countertop terminals can be used to process a variety of payment methods including credit cards, debit cards, gift cards, and even manually keyed-in transactions. They‘re also very secure (since they’re hardwired) and minimize the risk of data breaches.

Drawbacks: Because they use a hardwired connection, they have very limited mobility. Plus, they tend to be quite heavy, so it’s best to station them in a particular area of your store.

Cost: Best suited for brick-and-mortar retail establishments, these devices can cost anywhere from $100 to $500 or more depending on the features, model, or brand.

2. Mobile and wireless credit card machines

These credit card terminals don’t require a physical connection to the internet or phone line making them ideal for processing payments on the go. They connect over Wi-Fi, Bluetooth, 4G, or mobile data allowing you to accept payments anywhere.

Benefits: Because these devices are smaller and lighter than countertop terminals—and portable—they’re great for processing payments on the go. They’re extremely useful for mobile businesses like pet grooming, food trucks, auto repairing, etc. At restaurants or cafes, you can use them to process orders and collect payments wherever your customers are seated.

Drawbacks: They tend to be a little less secure than countertop machines since they use wireless connectivity. However, you can minimize the risks by adopting best practices in data security.

Cost: Mobile card readers can cost anywhere between $0 (if your processor provides the card reader for free) to around $250.

3. Virtual terminals

Virtual terminals are software applications that allow you to accept payments online or over the phone and don’t require a physical card reader. Most of them can be accessed from a web browser on a mobile device or computer and they work by allowing you to key in the payment details.

Benefits: The main advantage of virtual terminals is that they allow you to process card-not-present transactions easily. Plus, you can save on hardware costs.

Drawbacks: Even though their upfront costs are low, they can’t accept checks, cash, or debit cards and are inefficient for in-person card transactions. Also, since card-not-present transactions are riskier, you’ll have to pay higher processing fees.

Cost: Virtual terminals typically have a subscription fee associated with them, plus the transaction fees.

4. Integrated point-of-sale systems

If your POS system integrates with your payment processor, you can accept payments through it directly. Information flows smoothly between the payment processor and POS system. This eliminates the need to enter amounts manually and reduces the scope of human error. However, they’re usually expensive and you can’t choose your payment processor.

Benefits: Since payment information flows smoothly between your point of sale and your processor, there’s no need for manually keying in the purchase amounts. This minimizes the scope of human errors and expedites checkout. An integrated POS system also allows you to check inventory levels, sales trends, etc. easily.

Drawbacks: The downside is that you‘ll have to settle for a processor that integrates with the system. Typically, each system will integrate with only a limited number of processors so you may not have much of a choice. You won’t even have the option to switch, if you come across a processor that offers better rates.

Cost: Integrated POS systems can be expensive. Prices may start around $500 and go well beyond $1000.

Learn More

What to Look for in a Credit Card Processing Machine?

The type of business you run should largely govern your choice of a credit card machine. For example, if you have a mobile business and need to accept payments on the go, a wireless or mobile credit card terminal would be best. If you regularly need to process card-not-present transactions, a traditional terminal that can support them or a virtual terminal would be an ideal choice.

On the other hand, if you’re quite happy with your existing POS system, you might want to check with your provider about credit card readers that work best with it. That said, you’ll need to consider a few other important features before you choose a credit card machine for your business.

  • Connectivity – The level of connectivity your credit card machine offers is crucial—downtime or lag can significantly affect your ability to process payments and impact your bottom line.
  • Compatibility -Make sure that your credit card machine can sync up easily with your processor (without the need for any reprogramming). If it doesn’t, you may need to pay a fee to your processor for reprogramming the device to make sure it’s compatible. Some hardware providers sell terminals that can only work with their processing partners, so make sure that you choose a terminal that’s more universal.
  • Payment methods supported – Consider the payment methods you’ll need to support (credit cards, debit cards, mobile wallets, gift cards, etc.) and make sure that your credit card machine is capable of accepting them all.
  • Pricing and contracts – The cost of a credit card machine can vary greatly depending on its features and whether you buy it, rent it, or lease it. It’s best to avoid leasing because it locks you in on a long-term contract that you must pay to get out of if your needs change. Also, a credit card machine typically costs a few hundred dollars at the most, whereas leasing can easily add up to a few thousand over time.
  • Other features – Make sure your terminal has a PIN pad that enables customers to enter their PIN for debit card transactions. In addition, a device that has a built-in receipt printer can be helpful in serving customers who insist on paper receipts. Finally, a terminal with a customer-facing display might be nice to have (although this can be more expensive).

The best credit card machines recommended by Stax

If you’re using Stax as your merchant services provider, here are some of the best credit card terminals you can use:

An Easy Guide To Credit Card Machines_Body Image_Dejavoo Z11 Terminal

1. Dejavoo touch screen models Z9 and Z11

Perfect for businesses on the move, the Dejavoo Z9 connects over 3G/4G or Wi-Fi and accepts EMV, magstripe as well as contactless payments. The Dejavoo Z11 can function as a countertop terminal as well as a wireless terminal and accepts multiple payment methods.

An Easy Guide To Credit Card Machines_Body Image_Dejavoo Z8 Terminal

2. Dejavoo Z8

The Z8 has a simple plug-and-play feature and accepts EMV, magstripe, as well as contactless payments. It can connect over Dial, IP, or Wi-Fi, and has a built-in printer, function keys, and an LCD screen.

An Easy Guide To Credit Card Machines_Body Image_Bbpos Chipper Mobile

3. BBPOS Chipper 2X BT

The ultra-compact ChipperTM 2x BT can connect with your tablet or phone over Bluetooth and accepts all types of payments including EMV, magstripe, and contactless. It has a high-capacity battery and also uses less power so that it can function until closing time.

How to Purchase a Credit Card Terminal for Your Business

You can typically buy credit card machines from your merchant services provider such as Stax. With Stax, you can choose to pay for the machine upfront or sign up for our “pay protection plan”—an ongoing subscription where you get to use the hardware for a small monthly fee and no upfront cost.

Stax also offers unlimited terminal swaps for accidents, wear and tear, or defects. In addition, if you want to upgrade your terminal, you can do so through the program.

Stax’s subscription-based integrated payment solutions make payment processing simple and convenient. All you need to pay is a monthly membership fee—no contracts, no hidden charges, no markups, and no ancillary fees.

Contact Stax today for a custom quote.

Sign Up Blog