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How to accept card payments – everything you need to know
In April 2025, there were 2.15 billion debit and credit card transactions in the UK. To capture your share, your business needs to accept card payments. The good news is that doing so is now cheaper and easier than ever, regardless of your sector.
Accepting card payments opens up more opportunities for your business. Whether you sell online, over the phone, or face to face, you’ll never miss a sale just because a customer isn’t carrying cash. This guide walks you through everything small businesses need to know about taking card payments.
Find the best card machine for your business
How can I take credit and debit card payments?
Accepting card payments once meant locking into a long contract, leasing a terminal, and paying both monthly and transaction fees. While taking credit and debit card payments still involves some fees, the overall cost of accepting transactions of this kind has fallen sharply in recent years thanks to a much wider choice of card payment solutions.
Some of these solutions do not require you to have a merchant account — a specialist bank account that transfers card payments to your business bank account — as long as the amount you take in card payments does not exceed a certain amount.
The types of card payments you can take as a small business are:
In-person transactions – The cardholder pays using a card terminal or mobile card reader, for example, at the end of a meal or when making a purchase from a shop or market stall
Online transactions – The cardholder pays you for goods or services online via a payment gateway, for example to book an activity or order an item of clothing
Phone transactions – The cardholder gives you their card details over the phone, with the payment being made via a phone payment system or an online system that accepts MOTO (mail order/telephone order) transactions
Setting up your business to accept one or more of these types of transactions can boost your sales, increase customer satisfaction levels, and improve your company’s image by making it look more professional.
Accepting online and/or phone card payments also opens the door to selling your products or services to a much wider group, including international customers – especially if you choose a processing system that can convert foreign currencies into sterling.
What is the credit card payment process?
When a customer pays you using a credit or debit card, the process involves three steps:
Authorisation – When a payment request comes in, the card machine provider checks that the card is active, and that the cardholder has the required funds in his or her account
Sale – If the transaction is authorised, the card machine provider takes the money from the cardholder’s account
Transfer – The card provider sends the money received from the cardholder to the merchant’s (your) business bank account. This is generally done at the end of each working day, although the cash can take up to three days to arrive in your account
Different types of card payments explained
The type of card payments you accept depends largely on the nature of your business. If, for example, you run a shop or a restaurant, it’s important to accept in-person card payments. But if your company sells its products online, people need to be able to pay for them over the internet using a credit or debit card.
How to accept card payments online
If you want your customers to be able to pay you over the internet, you need:
A digital storefront – This could be your business’s website or a shop on an external marketplace. Either way, it’s where you showcase the products or services you have for sale
A payment gateway – This is an interface that enables online customers to input their payment information to make a purchase
A payment processor – This is the system that collects the payment information entered by your customers. It then liaises with the credit card networks and the bank that issued the card to transfer the funds to your business bank account. Some payment processors have their own merchant accounts from which the funds can be sent to you. Others require you to open a merchant account to receive card payments. Either way, you must pay card payment processing fees to benefit from the service
Alternatively, you can also accept card payments online by sending secure payment links to customers via email or even SMS. Offered by a number of payment processors, such payment links can be a good choice if you only expect to need to process online card transactions from time to time.
How to accept card payments in person
If you want your customers to be able to pay you by card face to face, you need a point-of-sale (POS) system with a card reader. These come in two forms:
A countertop card reader where customers can tap or insert their card
A mobile card reader that connects to the payment processor via your smartphone or tablet
The type of card reader that works best for you depends on where and how you run your business. If, for example, you have a physical counter where customers come to pay for their purchases, a countertop card reader is probably the best choice.
However, if you offer your services in a variety of locations – like a mobile hairdresser – a compact mobile card reader is the easiest option.
How to accept card payments over the phone
Phone card payments generally involve manually entering the customer’s card details into your POS system or online payments interface. As such, they require the same systems as online or in-person card transactions.
Which system is right for your business generally depends on whether you accept payments in person or online – or both. However, if you deal with a lot of over-the-phone card payments, it’s worth considering payment processing systems designed to streamline phone transactions.
How much does it cost to accept card payments?
What you pay to accept card payments will depend on the provider you choose. Typical fees include:
Card machine costs – You can either buy a card machine to process in-person transactions or rent one for a monthly fee
Set-up fees – Some providers charge a fee for setting up a new account when you sign up to a subscription plan
Monthly charges – This is the amount you pay per month to access the payment platform. It varies depending on the provider you choose and the number of card transactions you need to process. Companies that accept a lot of card payments could expect to pay £50 or more a month, while some pay-as-you-go plans have no monthly fees at all
Transaction fees – Also known as merchant service fees, these are usually a percentage — between 1% and 3%, say — of the value of the card payments you receive. They may be cheaper for debit card transactions than those made using a credit card and are generally paid at the end of each month
You often also pay fees for extra services such as refunds and foreign currency conversion on international card payments.
The fees involved are not the only factor to bear in mind when choosing a card payment processing system. It’s also important to consider the length of the contract you must sign up to, especially as some providers require you to commit for up to five years, and charge penalty fees if you terminate the contract before then.
What is the cheapest way to accept card payments?
Most card payment processors offer subscription and pay-as-you-go plans. The cheapest plan for your business depends on how much money you receive in card payments.
If you’re only just starting to accept card payments, a pay-as-you-go plan is probably a better option, because it can enable you to avoid paying monthly fees or set-up charges. However, you pay more per transaction with plans of this kind. That’s why businesses that process a lot of card payments are generally better off with subscription services.
Other ways to keep the cost of accepting card transactions down include choosing a mobile card reader for in-person payments.
Because many companies charge more to process credit card payments than debit card payments, you can sometimes cut costs by encouraging customers and clients to use their debit cards where possible.
Service-based businesses can also ask clients to pay via bank transfer, which does not usually involve paying any fees at all.
How do I choose the right card payment machine for my business?
Most card machines or virtual payment solutions should be able to:
Take credit/debit card payments, including contactless face-to-face payments
Take payments from digital wallets such as Apple Pay and Android Pay
Process refunds
Provide your end-of-day card sales total
However, the way they charge you for these services varies from one company to another. When comparing card payment systems, it’s therefore important to consider the type of transactions you want to accept, as well as the volume of card payments you expect to receive.
As a general rule, pay-as-you-go services typically work best for low-volume businesses, while subscription plans are better for companies that process a lot of card transactions.
Depending on the nature of your business, you may also want to check whether it can process payments from the full range of cards, including American Express.
And don’t forget to compare how long it takes for the money to arrive in your account. While some processors transfer the funds within 24 hours, others take several days.
FAQs
How secure are card payments?
Card transactions are a secure way of taking payment for goods or services. They are only authorised if the cardholder has the funds to make the purchase. This makes them less risky than cheques, which could bounce if the customer does not have the money in their account to cover the cheque.
Receiving payment by debit or credit card also avoids the danger of being taken in by counterfeit banknotes. Choosing a payment processor that complies with the Payment Card Industry Data Security Standard (PCI DSS) helps you to protect your customers’ card details.
Some payment processing companies even offer fraud detection services to help you spot and put a stop to undesirable transactions.
As a business owner, however, you may be liable for chargeback fees of up to £25 if a customer successfully disputes a payment made to you.
How much do card machines cost?
The cost of card terminals varies widely, depending on the type of card payments you want to accept and how much money you receive via card transactions.
A simple mobile card reader could be as little as £22, while a more sophisticated payment terminal can easily cost between £500 and £1,000.
You don’t always have to buy a card machine to accept card payments, though. Many providers allow you to rent the hardware you need for a monthly fee of around £20 or £30.