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Credit card reader – the ultimate guide to payment terminals

Looking at some statistics to put things in perspective, according to the Federation of Small Businesses, there were nearly 6 million small businesses at the start of 2020 in the UK. Put differently, SMEs account for 99.9% of the business population. This means that small and medium-sized merchants make up a big part of the private-sector economy. In an age where more and more people are paying with cards, how can merchants ensure that they don’t miss any card payments?

This extensive guide is for you if you find yourself asking what a credit card reader is, how it works, what types of card machines are on the market, and more, as we seek to answer some of the most common questions surrounding this fascinating topic. Let’s go!

What is a card reader?

The world of payments has changed drastically over the past few decades and years and it’s in a constant state of evolution. From paying with cash only, cheques were introduced, and then came along the card machine. And if you ask yourself what is a card reader, here’s a brief description:

A physical payment machine, although it can be virtual or on your smartphone these days, too, a card reader is a payment acceptance device that can accept transactions via magstripe, Chip&PIN, or contactless payments.

The latter uses NFC, or Near-Field Communication, in order to transfer the funds from a customer’s debit, credit, prepaid, or gift card into a merchant’s account. The old term used for credit card readers is PDQ machines. They come in all shapes, sizes, and colours – they can be stationary or mobile – but their primary function is the same: to help merchants accept payments.

How does a card reader work?

Essentially, these machines are a specified piece of communication technology. But how does a card reader work and who does it communicate with?

First, when a customer presents their card to a merchant, the card machine starts a process of data exchange. It communicates with the customer’s bank to determine whether there are funds available for the transaction to be processed. Then, once there’s been a hold placed on the customer’s funds, these are transferred into the merchant’s account.

Before getting into details, it’s worth looking at some of the key components of a debit or credit card to help clarify things. Let’s start with the magnetic stripe or magstripe, on the back of the card. This stripe contains cardholder data and can be transmitted to a merchant.

Similarly, you can insert the chip on the front of the card into a card reader for the merchant to process the transaction. With a Chip&PIN transaction, the customer’s PIN is usually required. Finally, there are contactless payments, so if your card has the contactless logo and you hover it or hold it against a card reader for a few seconds, it will also process the transaction.

While most payment service providers on the market today, as well as banks and financial institutions, take a couple of days to ensure settlement of funds into a merchant’s account, with myPOS this is different. You get access to your funds as soon as you make a sale. This means the instant settlement of funds, better and easier operations, no more liquidity challenges and so much more!

Types of card readers

Photo of various types of credit card readers

Now that we’ve looked at how a payment is processed and how a credit card machine works, it’s time to look at the different card machine options you have available to you. Essentially, the card machine you choose should be specific to your business needs. For example, a taxi driver who’s always on the go will benefit from a mobile card machine whereas a retailer might choose a countertop device. 

At present, myPOS offers four different types of card readers to help you accept payments. These are mobile, virtual, softPOS, countertop, and unattended. 

Mobile card machines

Mobile POS devices are just that – mobile! They’re not connected to a power source with cables and you can take them with you anywhere you go. They’re ideal for the spas and beauty centres, the hotel and accommodation industry, taxi drivers, those in the restaurant, pub, coffee shops, and so much more.

There is a wide range of mobile card readers – some are traditional with a keypad and others are smart and come with a touchscreen. Some need to connect to a phone or a tablet to accept payments and others simply use a free DATA card for Internet connectivity.

Some of the traditional devices like the myPOS Combo can print receipts. However, the myPOS Go and myPOS Mini are devices that issue digital receipts by enabling you to send them to your customers via email or SMS. 

The smart devices, on the other hand, are powered by Android and while some can issue paper receipts, others issue digital receipts. The primary advantage of smart devices is that you can connect them to various apps to help you ease your business operations, manage inventory better and so much more.

One such app is the Cash register app, with which you can enjoy cloud-based inventory management, apply discounts, accept and administer different payment options, as well as issue receipts for a card, cash, and split payments.

The beauty of all the myPOS devices is that they each accept not only contactless payments but Chip&PIN and magstripe, too.

Virtual terminal – MO/TO

Whether you own a hotel and accommodation business, a car rental company, a travel agency, or another type of business that requires some type of prior reservation, you’ll know how important MO/TO payments are to your business’s prosperity and success.

Defined as “mail order, telephone order” transactions, merchants usually perform MO/TO payments when a customer calls to place an order for a product or make a booking over the phone or via email. 

With the shrinking of borders across the world, being able to cater to a clientele that’s physically distant from you and your business has become a priority. As a myPOS merchant who would like to accept payments by phone or email, you will need to apply for the MO/TO functionality in your myPOS account.

Once our team approves it, you’ll be ready to accept the above-mentioned payments. A customer will call you with their card details – PAN number, cardholder name, expiry date, and CVV number, you’ll enter these details in your myPOS account, and the payment will be processed. 

There are several benefits of accepting MO/TO payments. These include the fact that they support all popular payment cards, there’s no need to install any software, you only need a free myPOS account, and you can limit access to MO/TO payments to authorised persons only.

You will also be able to track in real-time from any location, use the MO/TO service on your computer, smartphone, or tablet, and process such payments directly from your user account.


SoftPOS, or Software Point of Sale, is basically a payment solution through which turns your smartphone into a card reader through an application.

That way, you can take payments from cards, e-wallets, and NFC wearables. It’s an innovation that permits merchants to acknowledge debit/ credit card transactions straightforwardly on their smartphones or tablets without the requirement for any extra programming.

An example of a softPOS app is myPOS Glass. Glass uses the current card payment framework to connect the past and future technology. It makes such solutions accessible on your smartphone and different gadgets that have become a necessary piece of our life and more than that – our technology appears to grow around contactless and portable.

And now we come to some devices which are not exactly card readers, but rather POS systems that include card readers in the offering:


A vector image of a countertop payment terminal

Countertop devices include a touchscreen, tailor-made business apps, a printer, and a cash register. If you run a retail store, restaurant, pub, or coffee shop and you need a powerful, smart device to help you accept payments and manage your inventory, the myPOS Hub and Hub+ devices are your best bet.

Both devices are powered by Android and come with a host of apps to help you manage sales and stock. The myPOS Hub has an 8.0” capacitive touchscreen, while the myPOS Hub+, which comes with a thermal printer, has a 15.6” impressive sensor display and a second customer-facing display. Both devices come with Wi-Fi, Bluetooth, and 4G SIM connections. 

Unattended devices

These types of devices come with a touchscreen with impact-resistant glass. They also have a quad-core processor, a hard covering, a thermal printer with automatic separation as well as cater to a range of card readers. The myPOS Unattended devices are terminals that are best suited for vending, parking, and ticketing hotspots.

They are vandal-proof, come with a sturdy chassis and offer multiple connectivity options. The myPOS Kiosk, myPOS Integra, and the myPOS Mini are excellent solutions for self-service projects. They come with multiple connectivity options and can issue digital receipts, which you could send to customers via email or SMS. 

And the best part with all of these types of card readers? Merchants who sign up with myPOS benefit from a free merchant account, free IBAN, and a free business card. But that’s not all! Your funds are instantly settled into your account so that you don’t have to deal with any liquidity challenges or operational setbacks.  

How much does a card machine cost?

Before delving into the most common questions around card readers, merchants often ask this question: “how much does a card machine cost?”, so let’s tackle it first. To begin, there’s no set price for a card machine. Ultimately, you pay for the functionalities that you get.

So, let’s take a look at some of these card machines and what they offer:

  • myPOS Go – pocket-sized, lightweight, and sturdy, the myPOS Go device can be purchased at the low price of only 29 GBP, breaking barriers to payment acceptance. 
  • myPOS Mini – this card reader has a durable touchpad and enables you to send digital receipts via SMS or email. It goes for 119 GBP.
  • myPOS Combo – one of our bestsellers, the myPOS Combo not only prints paper receipts which can be custom branded to suit your business, but it also has a robust design with a durable keypad and long-lasting battery life. This device is priced at 199 GBP. 
  • myPOS Carbon – the shockproof, dustproof, water-resistant myPOS Carbon is one of the latest additions to the smart family of devices. It goes for an attractive 189 GBP and can print receipts through its high-pressure thermal printer. 
  • myPOS Slim – a smart device that comes with a barcode scanner, the myPOS Slim is priced at 189 GBP. It is elegant, lightweight, and easy to carry, and is your new best friend for accepting payments. 
  • myPOS Smart – this Android point-of-sale terminal comes with a 5.0” touchscreen display, a dual camera and can operate with a variety of apps to make payment acceptance that much smoother. It is priced at 229 GBP.
  • myPOS Smart N5 – this is another Android POS terminal with a thermal printer. It has a 5.5″ touchscreen display, dual camera and is priced at 249 GBP.

Here’s a summary of the myPOS card devices and their corresponding prices and transaction fees:

DevicePriceTransaction fee
myPOS Go29.00 GBP1.10% + £0.07 *
myPOS Mini119.00 GBP1.10% + £0.07 *
myPOS Combo199.00 GBP1.10% + £0.07 *
myPOS Carbon189.00 GBP1.10% + £0.07*
myPOS Slim189.00 GBP1.10% + £0.07*
myPOS Smart229.00 GBP1.10% + £0.07 *
myPOS Smart N5249.00 GBP1.10% + £0.07 *

* Transaction fee can go up to 2.85% if the card issuer is outside the EEA. See the full pricing here.

Wondering what a transaction fee is? This refers to the percentage and fixed fee that the payment services provider charges the merchant for each transaction.

Other than that, with myPOS, you pay no monthly, annual, or sign-up and subscription fees, which means you can focus on what matters and that’s making more sales!

What is mPOS?

Before answering what is mPOS?, it would be a good idea to backtrack a bit and discuss some characteristics and features of classic POS devices. Classic card readers in the past tended to be connected to a merchant’s countertop using cables for power/electricity as well as to establish an Internet connection. They also operated at a fixed location and they used a mounted terminal, a monitor, a cash drawer, and a receipt printer. 

All this changed when mPOS card readers were introduced. In short, mPOS stands for “mobile Point of Sale” and it refers to the ability of your card reader to go everywhere with you.

You are no longer limited to your location and as a taxi driver or a waiter, you can carry your card machine with you wherever you go – on the road or between tables, you go to your clients, they don’t come to you. These devices make it much easier and more convenient for your customers to pay!

So, what are some benefits of an mPOS device? There are quite a few, but let’s look at some of the most prominent ones. To begin, these credit card readers are very versatile and can offer you inventory management for your products at your store, they enable you to offer your customers discounts, you can accept card-not-present transactions, and also create employee accounts.

Other benefits include:

  • Don’t confine you to a single location
  • Help improve our customers’ experience
  • Free up valuable retail space on your countertop
  • Accept new payment methods such as Google Pay and Apple Pay
  • Can be cost-effective solutions for small businesses
  • They comply with privacy and security regulations
  • Transactions are encrypted

With all these benefits, it’s certainly worth considering opting for an mPOS device!

Soft POS – taking card payments via mobile phone

If you haven’t heard about softPOS payment solutions, the time to find out about them is now. SoftPOS is essentially a payment solution through which you download the myPOS Glass app and you’re now able to accept payments on your smartphone!

It enables you to take payments from debit and credit cards, mobile wallets, and NFC wearables. myPOS Glass helps you take contactless payments on the go anywhere, anytime.

You don’t need additional hardware, cables, or dongles to operate it – just your smartphone and the app. It’s a completely secure payment solution that’s suitable for freelancers, professionals on the go, delivery and courier businesses, seasonal markets, food trucks and so much more.

Available in two pricing plans – Starter and Pro – you can choose the most affordable and suitable plan for your business.

What is a PDQ machine?

After all this talk about mPOS devices and SoftPOS solutions, it’s time to look at what a PDQ machine is. Briefly explained, PDQ stands for “Process Data Quick” and if you think that they’re something different from a typical card reader, you would be wrong.

We used the name PDQ in the past, especially before Chip&PIN was introduced in the UK in 2006. It was the commonly used name for regular card machines. Later on, card terminals, POS terminals, POS devices, card readers, and card machines came into play, but overall a PDQ machine is the same as your typical card reader.

What was the payment process in the past? It all boiled down to a customer swiping their card on a PDQ machine, having the receipt printed, the customer would then sign the receipt, and the merchant or their staff would check that the signature on the receipt matched the signature on the card.

A relatively tedious process that wasn’t very safe since anyone who got hold of a customer’s card fraudulently could easily forge the signature on the back. In fact, since the signature requirement was taken away, it is estimated that between 2004 and 2014, over 81.9 billion GBP was saved in fraudulent transactions, with the introduction of PIN entry, which is a number only known to the cardholder.

A photo of an old PDQ machine

So, how does the process work in practice? The customer’s card is entered into the PDQ machine after the payment amount has been entered. Next, a request for authorisation is sent to the card issuer, also known as the customer’s bank, through the PDQ machine.

Authorisation is granted if the system detects sufficient funds in the card. For the last step, the framework transfers the required funds from the customer’s account to the account of the merchant.

It’s important to note at this point that while most payment services providers settle funds into the merchant’s account within several days of the transaction in question, myPOS settles the merchant’s payments instantaneously.

PDQ machines or card readers come with a wide range of benefits. Here are just a few of them:

  • Secure: As PDQ machines comply with the highest industry standards, this eliminates and minimises any potential for fraudulent transactions. 
  • Affordable: Merchants can take advantage of affordable PDQs, going from as little as 29 GBP. 
  • Fewer cash-related errors: They minimise the likelihood of errors related to cash acceptance.
  • Accept all types of payments: These range from contactless to NFC, Chip&PIN, and magstripe.
  • Better customer satisfaction: Consumers these days are seeking ever more secure and hassle-free payment experiences, and paying with a card is quickly becoming the norm. 

Who invented the credit card chip reader?

As mentioned previously, the characteristics of a credit card are a magnetic stripe, the cardholder’s details, a contactless logo, a CVV number, and a chip. Let’s inspect this chip.

It is generally inserted in a card reader in order to process payments. The chip contains all the cardholder information and can communicate with both the merchant’s and the customer’s banks or card issuers. So, who invented what we also refer to as the “smart card”? French inventor Roland Moreno patented the chip card in 1975.

The microprocessor in the chip was initially used for calling cards but was later introduced to bank cards in 1985. Just seven years later, in 1992, its implementation on all debit cards became mandatory in France. The UK lagged behind a bit, introducing Chip&PIN cards in 2004. They became mandatory on all British payment cards in February two years later. One of the primary purposes of using a chip and a PIN to make payments was to reduce fraud.

Before the chip card, customers would need to authenticate payments with a signature, although this was easy to replicate, leading to fraudulent transactions.

How to use a card reader

With all that’s been said about card machines so far, you might have already purchased yours. But what do you do once you’ve taken it out of the box? How do you use it? In this section, we look at some ways in which you can start accepting payments with a card reader.

One of the first things that need to be done is to open your very own merchant account with your payments acceptance provider. If you’ve already purchased your device, it’s time to see it in action.

So, how to use your card reader to accept payments? Keep reading to find out!

Let’s start by discussing payment acceptance on traditional and smart devices. Here are the easy steps for doing so:

  1. Enter the purchase amount
  2. Swipe the customer’s card or hover/tap it over the card machine, if it’s contactless
  3. The card information will be communicated to the customer’s bank, and if there are sufficient funds in the customer’s account the payment will be accepted
  4. If your card machine has a printer, you can print a receipt. If not, you can send a digital receipt to your customer via SMS or email.

And what’s the process with ePOS systems like the Hub and Hub+ devices?

  1. Enter the payment amount
  2. The customer taps their card 
  3. Payment is approved
  4. Print two receipts – one for you and one for your customer.

Finally, how can you take payments through your smartphone with myPOS Glass? It’s as easy as 1-2-3:

  1. Type in the payment amount on your smartphone
  2. Your customer will tap their contactless card on the back of your phone
  3. A sound signal is heard that the payment has been accepted
  4. Send a digital receipt via SMS or email.

Using your card machine is much easier than you might think! They’re designed to be intuitive and help you accept payments without complications. 

Does a credit card reader need Wi-Fi?

A wifi connection between card reader and smartphone

In short, you don’t necessarily need Wi-FI in order to accept a payment. There are other ways to connect to the customer’s bank and then to your own provider for the funds to reach your merchant accounts such as 3G/GPRS, Bluetooth, and even Wi-Fi connections.

Let’s take a closer look at each one starting with 3G/GPRS. It’s worth knowing that all myPOS devices come equipped with a free built-in DATA card for 3G/GPRS connectivity everywhere in Europe.

Then there’s Bluetooth. You can connect your smart myPOS device to the Internet via Bluetooth. However, keep in mind that this is possible for Android devices only.

Here are the two steps for doing so: 

  1. Download and install the free myPOS Bluetooth Service mobile app from the Google Play Store
  2. Open the app and it will automatically launch a communication service. All you need to do is finish by closing the app. 

The steps for connecting your myPOS device to Wi-Fi differ per device. Also note that the supported encryption methods for Wi-Fi networks are WPA and WPA2.

How do I connect my card machine to my router?

Designed to be mobile, convenient, and easy to use, all myPOS card readers can connect to the Internet in order to process payments via the three methods mentioned above.

However, you cannot connect your myPOS card machine to a router via a LAN cable as they’re mainly created to use the specially designed, free DATA card for connectivity across Europe. The only way to connect a myPOS card reader to your router is through a WiFi connection.

Card reader cleaning

So, you’ve bought your card machine, you’ve connected it to the Internet, you’ve accepted payments and after some use, now it’s ready for a clean. But how do you do this? Are there any special materials you need to clean your card reader? Let’s take a closer look.

Below are the materials you’ll need to clean your machine:

  • Disinfectant cleaning spray for electronics
  • Cleaning card for card readers
  • Disinfectant wipes for hardware

It’s important to always read the labels of the materials you purchase and check whether they’re compatible with your device.

If you like, you can also make your own homemade card machine cleaner using a damp cloth or vodka with essential oils to disinfect your device and add a pleasant aroma to it.

Another way to help keep your device free from germs, scratches, and bumps is to invest in a silicone case to protect it. They come in different colours and can help protect your device. 

How to reset a card machine

If you’d like to reset your myPOS card machine, follow the instructions below:

For traditional devices: myPOS Go, myPOS Mini and myPOS Combo 

Use this option with caution and only if you want to reset your myPOS traditional card reader. Your device will display a screen where you need to enter a deactivation code. The code can be generated when you log into menu Devices > All Devices, choose a specific device > Settings > Reset.

You should take into account that this will restore your device settings to the default ones and your traditional myPOS card reader will no longer be attached to your myPOS e-money account. If you want to continue accepting payments, you will need to reactivate the device. 

For smart devices: myPOS Carbon, myPOS Slim, myPOS Smart, and myPOS Smart N5

You can reset your device and start using it with a different outlet or myPOS account. This function will restore your default device settings and you will no longer be able to accept payments.

Go to the Settings menu > Reset. To start using your device again, you will need to activate it.

How to choose a card machine

A contactless payment on a card machine

By now, you might be thinking: “okay, I understand the different types of card machines available, but which one should I choose for my business”? We’re here to help! These are our top five criteria for how to choose a card machine. Let’s dig in!

1. Merchant account – One of the first questions you should ask yourself is if your payment services provider will open a merchant account for you. But what’s even better is if this account comes for free. With myPOS, you get a free merchant account with an IBAN that gives you access to your funds. 

2. Transaction rates – Next, take a look at the transaction rates charged by your payment services provider. Usually, these rates are a percentage and a small fixed fee. The lower they are, the better for you as this rate is charged for every transaction made by every customer who makes a purchase from you. 

3. Fund settlement – Another important factor you’ll definitely want to keep in mind is when funds are settled into your account. Whereas most providers settle your funds received from your customers into your merchant account within a couple of days, myPOS offers instant settlement of funds, eliminating liquidity challenges. This is perfect for the taxi driver who needs to fill up his car with fuel after a ride or a restauranteur who needs to stock up on more products.

4. Value-added features – Also look out for value-added features that come with the complete package. These include getting a free Visa/Mastercard business card to give you access to your funds. Other features include paying no extra monthly, annual, or sign-up fees. Do you get 24/7 customer support? At myPOS, all these come together as a free business-in-a-box solution. 

5. The right card payment machine for you – Finally, choose the card machine that’s right for your business. This will depend on your industry type, your business needs, and more. From the small, compact, and affordable myPOS Go – ideal for taxi drivers – to the classic myPOS Combo that comes with a paper printer – perfect for the food and beverage industry, or the smart family of devices – for businesses that would like to make use of apps for inventory management such as retail stores or hotels – you really have your pick of mPOS devices at your fingertips!

What is the best card machine for a small business?

Small companies rarely have large budgets, so opting for a more affordable card machine for your small business is your best bet. Choose the myPOS Go device, which only goes for 29 GBP and is compact and versatile.

As mentioned above, this device doesn’t have a paper printer, but that’s not to say that you can’t issue digital receipts which can be sent to customers via SMS or email. It’s also mobile and portable, which means you can take it anywhere with you. Then there are the devices in our smart family of devices that offer great apps to sync with your business and help you run it smoother.

Alternatively, consider the myPOS Glass solution which turns your Android smartphone into a payment terminal. myPOS Glass is simple to use, requires no additional hardware, and comes in two affordable pricing plans. 

How to get a card machine

Getting a card machine from myPOS comes with many advantages. Compared to renting a machine from a bank or other financial institution, with myPOS you pay no monthly, annual, or sign-up fees. In addition, banks usually offer card machines with a rental option and this includes monthly fees.

With myPOS, this is different. You pay an affordable transaction rate only when you get paid. But where can you buy a card machine? myPOS makes it easy!

You can purchase your ideal POS terminal from the myPOS Online shop, a distributor/reseller, or from a myPOS physical store in a city near you! We’re constantly expanding and growing and looking for ways to get even closer to you!

Advantages of card machines for businesses

The world is inevitably turning to cards and cashless payments and one way for merchants to catch this segment of consumers is to invest in a card machine for their business.

Whether traditional or smart, each device described above comes with many advantages that will ultimately help your business grow. Some of these advantages are that these card readers make your business more efficient by offering fluidity in work processes and they offer faster, safer, and more hygienic payments.

With our smart devices – the myPOS Carbon, Slim, Smart, and Smart N5 – you can enjoy even more perks! Why? For starters, the myPOS AppMarket lets you download apps for your business.

And what’s better than that? The fact that you can develop your own apps, too! But don’t get us wrong. Our smart devices are packed with the functionalities of traditional devices as well and they’re super simple to use in order to accept payments.


The journey of payment acceptance has been a steady one, with lots of progress over the last few decades. We’re experiencing changes in leaps and bounds in payment acceptance technology, with card readers not being left behind.

Card readers have undergone a tremendous evolution to match the changes in society and increasing demand for more convenience. One example of this is the proliferation of contactless debit and credit cards, which need corresponding terminals to accept such payments. As magstripe and Chip&PIN retreat to the background, contactless payments are slowly but surely rising in the European payments landscape

Choosing a card machine that accepts each of these payment types is important for any business as you will not leave any customer uncatered for. But with so much variety in the credit card reader space, how do you choose the right card for your business?

This post has explored not only the different types of card machines that you can use according to your business needs but also the other important criteria you need to consider when choosing your payment services provider. 

In short, look for a provider who can offer you an instant settlement of funds, affordable transaction fees, and affordable POS terminals. You should also look for a free business card and free merchant account with IBAN, no monthly or annual sign-up fees, as well as 24/7 customer support. Your payment provider ought to offer you these features as part of the package with your card machine. With all this in mind, make the best decision for your business and help it grow!

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