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.

Advertisement - Article continues below

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.



Small business

Small business: how to chase late-paying customers

Many small business have trouble getting their customers to pay up on time. Here's what you can do about it.
23 Jan 2020
Small business

Small firms get trade-credit lifeline

Small businesses dependent on trade-credit insurance have been thrown a lifeline by a new government pledge to stand behind such policies.
22 May 2020
Small business

New grants for the self-employed

Self-employed workers can now apply for government support if their income has been affected by Covid-19.
22 May 2020
Small business

Small businesses: dealing with your landlord and suppliers

For many small businesses, the key to getting through the Covid-19 pandemic may be negotiating a sympathetic arrangement with the landlord or key supp…
12 May 2020

Most Popular

Investment strategy

How John Maynard Keynes learned the folly of market timing

In an extract from his book The Sceptical Investor, John Stepek explains how the great economist John Maynard Keynes came a cropper when he first star…
25 May 2020
Emerging markets

A new lease of life for the Brics

Emerging markets are having a surprisingly good crisis. Their long-predicted rise will now continue.
24 May 2020

Battling volatility: The benefits of an active manager

SPONSORED CONTENT – Alastair Wilson, managing director of Close Brothers, on the advantages of active investing in times of crisis.
21 May 2020