Most of your customers would rather pay by card. If you don't take cards, some of them will walk away. Getting set up is simple enough, but the choices you make at the start shape your fees, your cash flow and how much hassle it is for you.
Here's how to choose the right setup for your business, what it'll really cost and how to make card payments work for you once they're coming in.
Start with how you sell
The right kit depends on where your customers pay, not on what the provider wants to rent you. Here's a rundown of the main options, how they work and what businesses they're best for.
Countertop terminal: Sits at the till, runs on mains power and broadband or wifi. Best for shops, salons, cafes and reception desks.
Portable terminal: Battery-powered, connects over wifi or mobile data. Best for restaurants taking payments at the table, trades, markets and events.
Card reader plus app: A small reader paired with your phone or tablet. Best for new businesses, low volumes, side lines.
Tap to Pay on your phone: Your smartphone takes contactless payment with no extra hardware. Best for occasional in-person sales or as a backup device.
Integrated POS: Terminal linked to your till, booking or stock system. Best for busy sites that want sales, stock and reporting in one place
Every modern option takes chip and PIN, contactless, Apple Pay and Google Pay. So the real questions are where the payment happens, how many you take a day and whether it needs to talk to the systems you already use.
If you also sell online or over the phone, look for a provider that handles those too. One provider means one set of reports and one payout to reconcile.
Choose a payment provider
Your payment provider processes each sale and pays the money into your business account. There are two broad types.
Pay-as-you-go providers let you sign up online in minutes. You buy a reader outright, pay a flat fee on each sale and can leave whenever you like. They're simple, which makes them popular with newer businesses.
Merchant account providers set you up with your own account. Expect more checks and usually a contract. In return, businesses with steady turnover can often negotiate lower rates on each sale.
Whichever you pick, ask four questions before you sign:
How quickly will the money reach my account?
How long is the contract, and what does it cost to leave early?
What happens if the machine breaks, and how fast is the replacement?
Does it connect to my accounting software?
Work out what it'll really cost
Most providers charge some mix of the following:
A transaction fee on every sale, usually a percentage. Pay-as-you-go rates often sit around 1.5% to 1.75%.
A monthly fee to rent a terminal or use the service. Some providers don't charge one.
A one-off cost if you buy the hardware outright.
Extras, such as early exit fees, chargeback fees or a charge for faster payouts.
The cheapest deal depends on how much you're using it. A busy shop can save money with a monthly fee and a lower rate per sale. A newer company with fewer sales usually does better with no monthly fee, even if each sale costs a little more.
To compare fairly, you can take your monthly card takings and number of sales (or a realistic estimate) and ask each provider for the total monthly cost. A headline rate tells you very little on its own but when it's linked to your own numbers, it'll start to make sense.
Get set up as a limited company
Applying as a limited company is a little different from applying as a sole trader. Have these ready:
Your company name and Companies House registration number
Your registered office address and trading address, if they're different
ID for the directors, and sometimes for anyone who owns 25% or more of the company
Your company's business bank account details
A rough idea of your expected monthly card takings and average sale
Payouts should go into the company's business account, not your personal one. Your company is a separate legal entity, and mixing the two makes your bookkeeping, tax and year-end accounts a nightmare.
The provider will run checks before approving you. Pay-as-you-go sign-ups can take minutes. A merchant account can take a few days or longer, so apply well before you need to start taking payments.
Make card payments work for the business
Plan around payout times. Card money doesn't land instantly. Next working day is common, and weekend sales often arrive on Monday or Tuesday. If you pay suppliers or staff on fixed dates, build that gap into your cash flow.
Record sales and fees separately. Most providers take their fees before paying you, so the amount that lands is less than you sold. Record the full sale as income and the fees as a cost. Connecting your provider to your accounting software does most of this for you.
Check the VAT on your invoices. Transaction fees are usually exempt from VAT, while terminal rental usually isn't. Ask your accountant how to treat each line.
Don't add a card surcharge. In the UK, it's illegal to charge consumers extra for paying by card. Build your costs into your prices instead.
Keep your records tidy. A clear history of card takings shows how your business is trading. That's useful for your own planning, and lenders may ask to see it if you apply for funding. Some types of business finance, such as merchant cash advances, are repaid as a share of your future card sales.
Keep it secure
As a business taking card payments, you're expected to follow the card industry's security standard, PCI DSS. For most small businesses using a modern provider, that means filling in a short annual questionnaire. Your provider will tell you what's needed.
A few habits cover the rest:
Let customers enter their PIN in private, and never ask them to read it out
Keep terminals where you can see them and check them for signs of tampering
Never write down or store card numbers
Install software updates when your provider sends them
Train staff on refunds, as fake refund requests are a common scam
If anything looks wrong, stop using the terminal and call your provider.
In summary
Match the kit to where you sell. Compare providers on total monthly cost, not the headline rate. Send every payout to the company account. Get those right, and card payments become one less thing to think about.
Frequently asked questions
Can a brand new limited company take card payments?
Yes. Many pay-as-you-go providers accept new companies, and you can sign up in minutes. They’ll check your company details and ID for the directors. A merchant account can take longer and might ask for more, so lots of new companies start with pay-as-you-go and switch later once their sales grow.
What’s a chargeback, and how do I avoid one?
A chargeback is when a customer disputes a card payment with their bank, and the bank takes the money back from you while it looks into it. You can be charged a fee on top. They happen more with online and phone sales, but they can happen in person too. Keep receipts and proof of delivery, be clear about your refund policy and reply quickly if your provider asks for evidence.
Can I take card payments without a card machine?
Yes. Many providers let you use Tap to Pay on a compatible phone, so you can take contactless payments with no extra hardware. You can also send a payment link by email or text, or add a pay-by-card link to your invoices. It’s a handy backup if your terminal breaks or you only take payments now and then.
