With card payments accounting for more than 70% of all payments in the UK, it should come as no surprise to find chip and pin terminals in shops and businesses throughout the UK and beyond. Not only do they make payments more convenient for customers, but they also improve the security of transactions and help to minimise credit card fraud.
In order for your business to use chip and pin as a payment method and you will need a Merchant Account and a chip and pin terminal.
In this article we’ll cover the following chip and pin machine essentials for you:
How Chip and Pin Machines Work
Chip and Pin machines (also known as PDQ’s) are small devices with a keyboard, a small screen and a card slot; occasionally chip and pin terminals can also have separate keypads.
Inside the machine is a chip and pin card reader. The customer slots the card into the machine and enters his or her four-digit PIN. The card reader can then read the chip and determine whether the customer has sufficient funds to pay for the purchase. The payment will then be denied or accepted there and then.
The Benefits of a Chip and Pin Terminal for Your Business
Accepting payments by chip and pin in the UK offers many advantages to your business and your customers. This can more than make up for the (relatively low) monthly fees you’ll be required to pay for having and using a terminal.
Chip and pin is a very secure payment method
When used to pay for a transaction it is important that the debit or credit card being used is genuine and belongs to the individual using it.
Chip and pin cards improve transactional security because the microchip embedded in the card protects against counterfeiting and the requirement of a PIN prevents the card being used if lost or stolen. In fact nearly all UK card transactions are now verified by PIN (including contactless transactions).
The use of chip and pin card processing has been seen as a huge success in combatting fraud, with countries such as France reporting an 80% drop in card fraud since its introduction.
Chip and pin terminals can work offline
A key benefit of chip and pin machines is that they can be used offline, which ensures you can still accept payments even in areas with slower internet or weaker phone signals.
Whereas swiping a magnetic stripe card required immediate authorization from your merchant account provider, chip and pin transactions can be stored on the terminal and transferred in bulk at the close of business.
More customers than ever prefer to pay by card
Another advantage is that more and more consumers are using cards to pay for goods and services. After all it’s much more convenient to carry one card than having to carry large amounts of cash. It also saves people the worry of not having enough money on them when they are out shopping or eating.
Statistics also show that in October 2016 the average monthly spend per Debit Card was £392. This shows just how much consumers prefer paying by card instead of by cash.
It is more quicker and more convenient than cash
Today’s customers want a better shopping experience. They purchase from businesses who can offer not just great products and excellent customer care, but increasingly important is a focus on fast, convenient and secure transactions too.
Contactless cards are being rapidly adopted and used by consumers who spend £30 or less. Apple Pay and other Smartphone methods are also becoming popular because they are fast, convenient and reliable.
Having a Chip and Pin machine means that you can accept payments from your customers by debit/credit cards, contactless cards and smartphone payments.
You’ll have less cash on the premises
Types of Chip and Pin Machine
The type of chip and pin solution you choose, depends on your business:
Countertop Chip and Pin Machines
What is it: A small terminal with a built in keypad (occasionally separate) that sits next to the checkout or point of sale. Countertop chip and pin machines are generally quite easy to install and set up.
Requirements: A broadband router or telephone line. A nearby plug socket for charging.
Ideal for: Small and medium sized businesses with a fixed, physical location or point of sale. A good choice for retail outlets and shops.
Customer benefits: Quick and easy card payments with secure processing. Customers know where to pay as there will typically be a clear checkout/point of sale area. Classic chip and pin terminal, which means customers know what to expect and how to operate it. Using a separate keypad can increase customer PIN security.
Drawbacks: Not the longest battery life so will need to be located near a charging dock or wall socket. Typically no back-up battery so your team will need to stay aware of how much juice is left throughout the day.
Costs and contracts: Monthly merchant costs start from £15 + VAT. Contracts tend to be for 24, 26 or 48 months and include ongoing support.
Portable Chip and Pin Machines
What is it: Portable terminals look similar to desktop chip and pin machines, but they can be detached from their docking station and used wirelessly, giving you more flexibility in accepting payments. Portable chip and pin machines are supplied ready to use and only require charging before being used. These machines work using Bluetooth connectivity and most have a 100-metre range from the base unit.
Requirements: You’ll need a socket near the docking station to plug it in so that the terminal can be charged when not in use.
Ideal for: Service or catering industry businesses, such as restaurants, cafés or bars, or any business where customers can pay without going up to the till. Also handy for pop-up stores and businesses with either a semi-permanent location or a large open-plan shop floor (e.g. an Apple store).
Customer benefits: Customers don’t need to move and can make quick and secure payments on the spot, whether this is the shop floor or a table where they are sat. Easy to set-up and an optional gratuity can be programmed in for staff tips.
Drawbacks: Limited to a 100-metre range from the base unit. This shouldn’t pose a problem for anyone but the very largest of shops though.
Costs and contracts: Portable chip and pin machine monthly costs start from £20 + VAT. Contracts vary between 12-36 months and these terminals can be bought outright if required.
Mobile Chip and Pin Machines
What is it: The newest generation of chip and pin machines that allow any and all businesses to accept card payments anytime, anywhere without any need for a landline. These machines work by using a mobile roaming SIM, which is connected to a mobile network such as O2 or Vodafone. Typically supplied with an in-car charger to keep the terminal charged when travelling.
Requirements: Mobile phone reception and a network provider you can rely on.
Ideal for: Any mobile businesses such as hairdressers, taxis and private hire firms, nail technicians and tradesman. Also ideal for pop-ups or start-ups without a fixed location. An excellent option for businesses at festivals or events.
Customer benefits: You’ll be able to take payments literally anywhere that has mobile phone reception or a Wi-Fi signal. This means customers can continue to make card payments without having to carry around lots of cash. Mobile chip and pin terminals are just as secure as portable and desktop card processors, so customers can have confidence in the security of the transaction.
Drawbacks: If the mobile reception is limited then it may result in slower transaction processing or payments failing to process. You will also need to keep an eye con the battery level, especially when on the move as if you run out of battery then you won’t be able to accept payments.
Costs and contracts: Mobile chip and pin machines start from around £25 + VAT. Devices can be leased or purchased outright and contracts are similar to other chip and pin terminals, lasting between 1-3 years.
Contactless Chip and Pin Payments
If you want to offer your customers the opportunity to use contactless payments then you’ll need to ask your merchant account provider for a chip and pin terminal capable of handling these transactions. They can enable a machine you already have, or provide with a new one.
Chip and Pin Machine Suppliers
There are a number of merchant account providers in the UK, with each offering different chip and pin terminal options as well as processing services. When considering an account provider, bear in mind whether they can provide the service you need for your business, what support is on offer and the sorts of chip and pin terminals are available.
Many small businesses have very specific needs that they must meet, so it is essential to work with a reliable and trustworthy provider. Below you’ll find our favourite three merchant account and chip & pin terminal providers.
Over 300,000 small businesses use Worldpay, who can provide counter top, portable and mobile chip and pin machines. There’s no joining fee and they offer flexible pricing plans, which include a Pay As You Go option letting you only pay a transaction fee when you receive a payment.
Another option is the Fixed Monthly Payment Plan or you can choose the Standard Payment Plan, which is normally used by established businesses.
A reliable option for small and medium-sized businesses alike, you can read more in our 2017 Worldpay Review.
Paymentsense have been ranked as one of Europe’s fastest growing payment providers and are used by over 50,000 UK small businesses. They offer competitive card processing fees, 24/ support and can get a card processing terminal to you within 3 days of signing up.
They offer mobile, portable and countertop chip and pin machines and fixed rates for the duration of your contract.
Read more in our 2017 Paymentsense review.
First Data have been in the UK for over twenty years and are one of UK’s largest payment providers. They offer contactless, mobile, countertop and portable machines.
First Data also allow you to accept MOTO payments too.
You can find out more in our 2017 First Data review.
Next Steps: Saving money on a chip and pin machine
Do you need to accept chip and pin payments?
If you do, then we can help you find the best UK deals for chip and pin terminals. Just fill in the form on top of this page or click the button below and one of our team will be in touch to discuss your business requirements.