Free chip and pin card readers

Are free card machines really free?

Here, our guide takes a closer look at the costs associated with free card terminals to see if they are suited to businesses big and small. We’ll review free chip and pin machines and the fees per transaction to help you decide if they are well suited to your business, or not.

Free card payment machines vs fixed terminal costs


Let’s start at the beginning, when businesses look to process card payments they will expect to pay for the chip and pin machine AND a percentage cost per transaction, alongside some additional processing fees. The majority of businesses choose to rent their card machines on a monthly basis (a little like a mobile phone contract) however some companies give an option to buy the terminal upfront. With the rise of challenger companies such as iZettle, Sumup and Paypal – lower cost card machines are available on the market with some even offering free terminals with little or no upfront fees. How do you go about finding the best merchant account for your needs? As the saying goes…there is no such thing as a free lunch. So, let’s take a look.

Free card machine costs per transaction

Depending on the size of your business, it may seem more financially viable to choose free card payment machines over the more traditional bank offering. However, the thing to be weary of is that the cost you’ll pay for each payment received will no doubt be higher.

Here’s an example…

A start-up or side hustle opts to take payments through iZettle – the card machine costs £19* upfront, compared to £19 per month from a high street bank. iZettle then charge 1.75%* per transaction thereafter. The same business then reaches year two of trading, taking transactions of up to £10,000 per month paying on average £175.00 in fees.

If they were to shop around, they could simply commit to paying £19 per month for a hired terminal and the fee cost could be reduced to as little as 0.5% (plus some additional authorisation costs*). The company would therefore save approximately £106 per month overall.

This example is why we always suggest you compare merchant services on a pound for pound basis, rather than on the headline rates alone or the card terminal/upfront costs.


*iZettle pricing correct as of July 2020.

* Costs vary dependent on the monthly takings of the merchant in the example

Comparing free wireless credit card machines for small businesses

As with the above example, we suggest you compare terminal contracts on a pound for pound basis. Our terminology buster should help you to understand the cost associated with processing card payments.

Many companies find the accessibility of wireless lower cost machines appealing, however it’s important to remember you don’t need a machine to plug into your personal mobile or tablet to be able to accept payments remotely. GPRS machines offer the same solution.

Often users of virtually free or low-cost card machines use them because they are smaller businesses or ones who work in numerous offsite locations. Another common reason is that they do not wish to sign long term contracts. Understandably there is a place in the market for low cost and quick payment terminals for these types of businesses, but always be mindful and review your outgoings regularly.


Free wireless card machine offers

Free and low cost PDQ machines are not limited to the challenger banks alone, brokers and resellers are also competing to win business. Offering a more substantial terminal for free will no doubt come with a catch. Do not be caught out…follow our guide to comparing merchant accounts before signing on the dotted line. Often when things seem too good to be true, they are.

Terminated merchant accounts – low cost providers

We regularly receive calls and emails from business owners who have been served notice by the likes of PayPal, Stripe and iZettle. The reason being, they work in volume processing. What we mean by that is that they will onboard high-risk businesses and then review their terms after the company begins to process. If you are operating in a high-risk industry we suggest working with banks and providers that will provide a solid solution suited to your business requirements rather than a cheaper option with the risk of being terminated.


How Merchant Advice Service work

Merchant Advice Services are proud to provide a free of charge, non-biased, advice-based website. The idea is to enable you the business owner to make informed decisions when it comes to merchant services and finance. If you are struggling to understand the payment terms of a free or low-cost chip and pin machine provider, our experts will be happy to help.


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