4 myths about PAYG card machines

If you’re new to taking card payments and are a small business, choosing a Pay As You Go (PAYG) card machine can be a good decision and a smart way to start taking card payments for the first time.

But they can also be a costly mistake for businesses that are more established and have started to see an increase in the number of transactions being made through a card or digital wallet.


There’re lots of myths and rumours that go around among business owners about the benefits of different kinds of card machines.


Some have elements of truth, others simply aren’t true.


But how can you separate fact from fiction and actually choose the right card machine for your business?


Here’s a quick guide to the biggest myths of PAYG card machines.

Contactless phone payment

Woman holding up Handepay  Card Payment Machine

  1. PAYG card machines are more convenient


It can be the case that a PAYG card machine can be beneficial for the right kind of business. 


But this is usually limited to businesses that don’t take many card payments.


As far as the hardware is concerned, PAYG card machines tend to be a bit smaller by design, but there’s not much difference between these types of machines and those provided by other suppliers.


So in terms of convenience, there’s little to choose from between a standard card machine and PAYG device.

2. PAYG card machines are cheaper


There can be some truth to this in some situations, but it’s not as cheap as you might think to use a PAYG machine - and the costs can increase rapidly.


For the simplest machine, you could probably pick one up for £20.


But this is the most basic machine and likely doesn’t have the kind of features you’ll need to make the investment worthwhile.


For example, the cheapest base model PAYG card machines only have a contactless tap section at the top.


They offer no way to accept payments via Chip and PIN and also don’t allow you to easily process refunds on the spot.


For the type of card machine you’ll actually need, you’re talking closer to £200 - 10 times the cost of the price often advertised.

Contactless card payment being processed

Contactless card payment taking place

3. PAYG card machines have better rates


This is completely false.


In fact it’s one of the biggest myths that business owners get sucked into when using card machines for the time.


Most PAYG card machine providers charge transaction fees between 1.7% and 2.5% for every transaction.


If you want to take remote or online payments via a PAYG provider you could face a transaction fee of up to 2.95% per transaction plus an additional fee for Card not Present cover.


So if you process £3,000 a month in debit card payments on a PAYG device, you could end up spending £800 a year in transaction fees alone.

On the other hand, if you choose a provider like Handepay, your transaction fees could be as low as 0.7% per transaction.

4. PAYG card machines are more reliable


Not always true.


Most PAYG card machines are wireless devices that rely on a stable WiFi or mobile connection to work properly.


If you’re trying to take card payments in a remote area, or a place with lots of WiFi interference, you could struggle to take card payments.


Plus, PAYG card machines have limited customer support available and - because you own the device outright - you’re responsible for any maintenance or upgrades of the hardware and software.


That can quickly become a high cost to your business when new devices or upgraded software is released.

Payment via phone being processed

What’s the alternative to a PAYG card machine?


If you’re starting to see your transaction fees creeping up to unnerving levels, or are starting to experience problems when trying to take card payments on a PAYG device, then you might be better off with a contract-based card machine.


You’ll pay a predictable monthly fee but you’ll also benefit from much lower transaction fees.

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

Sometimes, we link to other third-party websites to provide you with additional information. At the time of publication, we consider the information accurate, however, we do not have control over their content and are not responsible if any information on these websites change.

The products we display on our website are for illustrative purposes only - if your business requires additional facilities, you may receive a different model than advertised.

All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.