pdq machine card processing credit card terminal

For many years cash was king, but recently notes and coins have been suffering from a steady decline with consumers increasingly turning to card payments.

Research from the British Retail Consortium showed that the use of cash has fallen by 10% in the last five years. The same survey revealed that in 2013, 50% of the value of all transactions was paid for with a debit card.

As a business, not accepting payment by card could really limit your opportunities and also denies your customers some of the consumer’s rights they get by paying on plastic.

But to be able to process card payments means having a credit card machine. If you’ve never used one before you might have lots of questions about how they work, how much they cost and whether your business really needs it. This guide takes a closer look at credit card machines and how they work in practice.


  1. What Is A PDQ Machine?
  2. How Do Card Payment Machines Work?
  3. How Do I Get A PDQ machine?
  4. What Types Of Card Terminals Are Available?
  5. Buying Vs. Leasing A Terminal

What is a PDQ machine?

Also known as PDQ (Process Data Quickly) machines, credit and debit card payment terminals have been around for some time.

The current chip and PIN process may seem very familiar now but it’s a relatively new introduction to the market, originally being launched as a trial in the United Kingdom in 2003.

Before this, there was a system in place which required a signature from the card holder. Every card held a magnetic strip and the retailer was required to verify their identity by comparing signatures from the point of sale (POS) ticket to the reverse of the card.

Chip and PIN is not suitable for use by everyone and if a disability prevents a PIN from being entered, the bank must offer a ‘chip and signature’ option as an alternative.

A recent survey by YouGov, commissioned by CardSave, showed that nearly two thirds of people carry £20 or less on them but 93% of people carry a debit or credit card. Both of these use chip and PIN technology, and not being equipped for it in your business means you are likely to lose custom.

A decade after the introduction of the new technology, chip and PIN transactions have been cemented as one of the primary means of payment.

How Do Card Payment Machines Work?

On the original swipe cards, the magnetic strip was used to verify whether there were sufficient funds in the account and whether the card was valid. The PDQ machine may or may not have been linked to the cash register; in some cases manual confirmation of the sale value was required.

The chip and PIN system was introduced as a means to improve security, although at first there was considerable resistance and concerns were raised about the possibility of fraud.

The chip and PIN removed the need for retailers to check a signature and put all the responsibility onto the cardholder and the PDQ machine. The customer was asked to enter a four digit PIN into the PDQ rather than signing a slip of paper. The same checks were carried out into the validity of the card, and the available funds at the point of sale.

The retailer bore no responsibility for verifying identity or carrying out any checks; this was all managed by technology, one of the major differences in the process.

The PDQ machine requires a network to connect to the bank in order to carry out the background checks as well as verify the accuracy of the PIN. Even if there is no network signal, the chip in the card is capable of signalling to the PDQ machine whether the number was entered correctly.

The technology that comes with chip and PIN means the risk of fraud is substantially reduced, although like any form of payment, it’s impossible to eradicate it completely. These types of cards can’t be cloned, and there’s also no need to hand over your card; it can remain within your sight at all times.

It’s these factors which help to promote the reputation of chip and PIN as being one of the most secure forms of payment.

How Do I Get A PDQ machine?

A PDQ machine is provided by a number of different companies in the market, and there is a wide disparity between the fees and charges being levied.

It’s therefore a good idea to look around to make sure you are getting the most competitive rate.

Terminal providers will charge monthly fee for their ongoing services but there will be additional processing fees too. Be aware that in some cases, an artificially low monthly fee might disguise high processing fees. All fees should be taken into account when determining the true cost of the machine.

In order to get a machine you will need to have a merchant account. These are provided by a wide range of financial institutions, not just banks. A contract will be put in place and the funds in your merchant account can be transferred to your regular bank account within a pre-arranged period after the transaction takes place – usually two or three days.

What Types Of Card Terminals Are Available?

Broadly speaking, PDQ machines can be broken down into three different types: counter top, portable and mobile.

A counter top PDQ machine is one used by a traditional retailer and is connected usually via broadband. As the name suggests, it sits on the counter top and is located next to a till or cashpoint in a fixed retailing position.

For occasions when the payment facility needs to be a bit more flexible, such as in the hospitality industry, a portable PDQ machine is used instead. This typically relies on either Bluetooth or wireless technology and will only work when the terminal is within range of the central hub.

For sellers who are mobile, perhaps travelling between customers or out on the road, neither of these PDQ machine solutions will be suitable. In these cases a mobile PDQ machine is used, which works by piggybacking onto a mobile network.

Buying Vs. Leasing A Terminal

It is possible to either buy or rent a terminal and while the former provides you with security of owning the equipment; it also is likely to work out as the least flexible and most expensive option too.

The majority of businesses rent their terminals rather than buying them outright, and not just because this avoids the need to find the capital to make the purchase.

By renting the equipment you don’t have to pay for it to be repaired or maintained, and if it goes wrong your provider will be required to supply you with another one. If your business relies on being able to accept card payments, being without your terminal while it is repaired is unthinkable.

It’s also a technology which is rapidly evolving and more changes are always just around the corner. By buying a PDQ machine, you will be facing the cost of replacing it yourself if changes are introduced. And it may well be that these changes are not voluntary; when the system switched from swipe to chip and PIN, many small businesses were aghast at the cost involved in getting their POS set up to accept the new technology but had little choice than to foot the bill. By buying your own machine, if there are any wholesale changes you will have to purchase a brand new machine but if you are just renting, you can simply switch your model for the updated version.

According to the Money Charity, more than 32 million card transactions are performed in the UK every day with a daily value of £1.5 billion. Do you dare risk missing out on offering your customers access to the most convenient method of payment? To be a commercial success in the modern world, offering card payments is an essential.