How much does a card machine cost? Buy, rent, lease or pay-as-you-go

Part of Fees and pricing models. Start with the main guide: Interchange plus vs blended vs flat rate: which pricing model costs less?

"How much is a card machine?" is one of the most searched questions in the business. It has no single answer, because the machine itself is only part of the cost. The rest is what you pay each month and on each payment, and how you pay for the hardware changes both.

This guide breaks the cost into its parts, compares the four main ways of getting a card machine and shows you how to total the cost over a contract so that two options can be compared fairly. The figures in the examples are illustrative, and prices change, so use them to learn the method, then get current quotes.

What are the three costs of taking cards?

Many offers trade one cost against another. A reader with no monthly fee usually has higher fees on each payment. A rented terminal with lower fees on each payment has a monthly cost. Looking at one cost alone gives a false picture.

What are the four ways to get a card machine?

Our guide on card machine rental versus buying goes into the decision in more depth. The case of a machine on one contract and processing on another is covered in double contracts: terminal lease and processing.

What does each option cost over three years?

A one-month price tells you very little. Three years is long enough to see the shape of each option. Take an illustrative example with the same terminal under three arrangements.

• Rent: £22.00 a month for 36 months.
• Buy outright: £199.00 up front plus £6.00 a month for support and software.
• Lease: £35.00 a month on a 48-month agreement.

On this example, buying is the cheapest over three years and leasing the most expensive. The lease commitment of £1,680.00 continues for twelve months after the three-year point, which matters if the business closes or changes provider in the meantime.

These figures are for the terminal only. Your total cost also includes everything below.

Which costs sit outside the terminal?

Monthly fees

Gateway, PCI, statement, SIM or connectivity, and any minimum monthly charge. Add them up. See monthly fees on a card machine bill for what each one is.

Fees on each payment

Percentage fees and per-transaction charges. On a pay-as-you-go reader these are higher but there are no monthly costs. On a traditional merchant account these are lower, and there are monthly costs.

One-off costs

Set-up or activation fees, delivery, installation and any training. These are not always in the headline price.

The cost of leaving

An early termination fee, a terminal return charge or the remainder of a lease. These matter if there is any chance you will move or close. Our guide to early termination fees explains how they are calculated.

A complete cost: one example business

A business takes £4,000 a month across 200 payments, an average sale of £20. Two setups are on offer.

Setup A: pay-as-you-go reader. A one-off £39.00 for the reader, 1.75% per payment, no monthly fees.

Setup B: rented terminal on a merchant account. £22.00 monthly rental, £8.00 of other monthly fees, 1.20% plus 5p per payment.

At £4,000 a month, the pay-as-you-go reader is cheaper by £18.00 a month, and by about £609.00 over three years. If turnover were £12,000 a month, the percentage fee on the reader would be £210.00 against £144.00 + £30.00 + £30.00 = £204.00 for Setup B, and the picture would be level. At higher turnover, the rented terminal would win. See flat rate versus interchange plus break-even for how to find the crossover.

How do you compare options fairly?

1. Pick one turnover and one average sale. Use your own last three months.
2. Add every cost for each option. Hardware, monthly fees, percentage fees, per-payment fees, one-off charges.
3. Add up the cost over the full term. Use the contract length, or three years if there is no contract.
4. Add the cost of leaving. What would it cost if you stopped after a year?
5. Compare effective rates. Total cost divided by total turnover over the same period.
6. Test a bad month. Check the cheapest option still wins in your quietest month.

If you are not sure what turnover to use, a conservative figure is better than an optimistic one. A business that guesses high and signs a long rental may pay for years for a plan that never materialised.

What affects the price of the terminal itself?

The hardware cost varies with the type of device. As a rule of thumb, more features mean higher cost. Features that can raise the price include:

• Portability and battery life, as opposed to a countertop unit
• A printer, as opposed to emailed receipts
• A larger touchscreen and the ability to run apps
• Integration with a till or booking system
• Connectivity options such as mobile data, Wi-Fi and ethernet

Choose what you need. A market trader who never prints a receipt does not need a printer. A busy restaurant that needs table-side payments needs portability.

For consultants

When you quote, include the hardware in the comparison, not only the processing. A merchant's card machine is often the part they remember paying for, and it is also the part most likely to lock them into a long agreement. Show them the three-year cost with the exit cost included. The checkmyrates calculator includes a section for equipment, so rental, purchase and lease costs sit beside the processing fees in the quote.

Frequently asked questions

How much does a card machine cost?

It depends on the type and how you pay. The terminal can be bought, rented, leased or replaced by a low-cost reader. Add the monthly fees and the fees on each payment to get the real cost, and compare options over the full contract.

Is it cheaper to buy or rent a card machine?

Buying is usually cheaper over a few years, if you keep the machine and the provider accepts it. Renting costs less upfront and includes support. Total the cost over the term to see which wins for you.

Do I need a monthly contract for a card machine?

Not always. Pay-as-you-go readers usually have no contract and no monthly fee. Traditional merchant accounts often have a term of 12 months or more.

What is the cheapest way to take card payments?

It depends on your turnover and average sale. For small or variable turnover, a pay-as-you-go reader with no monthly fee is often cheapest. For larger turnover, a lower percentage with monthly fees usually wins.

What happens to my card machine if I switch provider?

If you own it and it is compatible, you may be able to keep using it. A rented or leased machine usually has to be returned, and a lease may continue to be charged. Check before you switch.

Are there hidden costs with card machines?

Possibly: separate terminal invoices, connectivity charges, PCI fees, minimum monthly charges and exit costs. See our guide to hidden fees on a merchant statement.

Figures in this guide are examples to show the method. Fees, rules and rates change, so check your own statement, contract and current rules before you decide. This is general information, not financial or legal advice.