Small business: the best card readers to use for accepting digital payments

As cash falls out of favour, small businesses need to be able to accept digital payments. Updating your payment systems is key. David Prosser picks the best of the card readers.

Big Issue magazine seller © Alamy

The Big Issue will soon be offering contactless payment

Big Issue magazine seller © Alamy

As cash falls out of favour, small businesses need to be able to accept digital payments. Updating your payment systems is key.

The direction of travel is clear. Small businesses are going to have to get to grips with the shift towards a cashless society. Even the Big Issue has just announced that its sellers will soon be using contactless payments devices; many potential buyers of the magazine no longer carry cash. However, many small enterprises around half, according to one estimate aren't prepared to take non-cash payments.

The good news is that going cashless has never been so easy. Thanks to new technologies and fierce competition between new entrants to the financial services market, small firms for which electronic-payments systems would once have been economically unviable now have lots of options.

The best card readers

At the cheapest end of the market, SumUp's card reader costs £29; you then pay 1.69% of each transaction. Square and iZettle also both charge £29 for their devices, with transaction fees of 1.75%.

Alternatively, Worldpay and PayPal have a range of different transaction charges, but may be more cost-effective if your business is making electronic sales of several thousand pounds a month. Nevertheless, cost should not be your only consideration. You also need a solution that reflects the way you trade. If you want to take orders over the phone, you'll need a device that offers the "card-not-present" option. In that case, SumUp's bargain-basement deal might not be the right one for you. If you're also making sales online or through a mobile platform, look for an all-encompassing solution.

Some companies may want to consider more sophisticated options. Several electronic-payments companies offer data-analysis tools that you can use to look at how your business is trading to identify your most valuable customers, for example. This could help you maximise profitability as well as ensure customers can pay the way they want.

Recommended

How to find an angel investor for your business
Small business

How to find an angel investor for your business

Make sure your start-up business has the right type of backer before signing a deal, says David Prosser.
11 May 2022
Small business owners: don’t duck the need to raise prices
Small business

Small business owners: don’t duck the need to raise prices

Many small businesses worry about passing on costs, but soaring inflation makes it a matter of survival, says David Prosser.
26 Apr 2022
Why hackers are increasingly targeting small businesses - and what they can do about it
Small business

Why hackers are increasingly targeting small businesses - and what they can do about it

Almost half of small businesses were targeted by hackers last year. David Prosser explains what is behind the cyber attacks.
10 Apr 2022
Should you use debt or equity to grow your business?
Small business

Should you use debt or equity to grow your business?

Loans and equity financing come with different terms and conditions, says David Prosser.
25 Mar 2022

Most Popular

Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022