How does a card payment machine work?

Having a card payment machine for your business is no longer an added benefit for customers, it’s become essential.

Fewer shoppers are using cash to make payments, and many customers have already moved on from using debit and credit cards, opting instead to use a digital wallet like Apple Pay or Samsung Pay on their smartphone or other mobile device.

Chances are, if you haven’t already started using a card payment machine, you’re looking at why you should.


We’re experts in helping businesses like yours get set up taking card payments for the first time. Common questions we get asked by businesses who are new to card payments are:

• How does a card payment machine actually work?
• Are they safe?
• How do you - as a business - get paid?
• How much does it cost?

To help, here is a quick guide about how payments are processed using a card payment machine to give you a better idea of what you’re signing up for.

But before that, let’s just run through a couple of quick things.

What is a card payment machine?

A card payment machine is a handheld device that you can use to accept payments either by Chip and PIN or contactless card.

Card payment machines are also capable of accepting payments using a smartphone or mobile device with a digital wallet.

There are three main types of card payment machine you could use:


Card Payment Machine being held showing amount due with person holding card payment


How does a card payment machine work?


Taking payments using a card machine is a simple process.

Insert card - Or tap...


To make a standard Chip and PIN payment, your customer simply needs to insert their payment card into the machine and enter their PIN number when prompted.

If you accept contactless payments, the process is even easier. Just ask your customer to tap their card against the terminal and the payment will be processed automatically.

You will have to set up a merchant account if you want to accept card, contactless or mobile wallet payments.

There’s more information about setting up a merchant account in this guide.

Contactless payments using a card reader happen using an NFC (near field communication) signal.

The payment card has a built in chip which interacts with the card machine once it’s in close proximity (within a few centimetres) to start the payment process.

Some people are initially concerned that these chips and wireless signals make cards vulnerable to fraud, but they are fully secure.

We’ve got more information and card payment machine security in this blog.


Contactless card payment being processed



Phone payment being processed

Start the payment clock...


Once the card has been placed close to the machine, it starts the payment process, which is simple and instant from your perspective.

This is the process your payment goes through:

The payment request from the card machine is sent to your merchant bank (who you set your merchant account up with), which will then ask your customer’s bank to authorise the payment from their account.

Once the transaction is requested, your customer’s details will be verified (at this stage they may be asked to enter a PIN as an additional security measure even if they’re using a contactless card) and confirm they have available funds.

A few seconds later...

If all the payment details are accurate and funds are available the payment will be authorised and the payment goes through.

All of this happens within a couple of seconds and your card payment machine will give you an instant notification that the payment has been authorised.

If there’s a problem, your card machine will automatically notify you.

This is another benefit of using a card payment machine because you can always be sure that you have been paid for a transaction.

Couple paying for eggs using phone


Hand holding a card alongside Handepay Card Payment Machine

A few business days later...


Once the payment has been made you can expect to see the money enter your account in a few business days. How many days depends on the settlement period you agreed with your provider when signing up.


Answering some Frequently Asked Questions we get about card payment machines


What kind of payments can you accept with a card payment machine?

We have a full guide on all the ways you can accept payments using your card machine in this guide.

But if you have the most up to date card payment machine you will be able to accept all major forms of payment including Chip and PIN, contactless cards and mobile wallets.

How much do card payment machines cost?

Depending on which provider you choose, a card payment machine can be cost-effective and a real boost to your business.

If you choose a reputable provider with transparent costs, such as Handepay, you’ll be able to take payments safely and affordably.

However, many providers add unnecessary fees, making accepting card payments more expensive than it needs to be.

Check any contracts before you sign, and make sure there are no hidden fees.

Want to know more about card payment machines?


Now you know how card payment machines work, hopefully you’re more confident that they are an ideal way of accepting payments from customers in a simple and secure way.

If you want to find out more about setting up and using a card machine for contactless payments in your business, get in touch with and one of our team will be happy to run through your options with you.

If you’re already using a card machine and want to see how much you could save by switching to Handepay, take our price comparisons challenge.


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.