What is a Chip and PIN machine and how does it work?

Chip and PIN technology is the smart way to do business.

The system offers business owners and customers a safe, fast and convenient way to process payments.

Our guide covers all the basic questions about Chip and PIN machines, how they work, the different types of devices and estimated costs.



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What is a Chip and PIN machine?

Chip and PIN machines are a debit and credit card payment system that process financial transactions.

These devices are able to process a payment or transaction in a swift and secure manner.

How does Chip and PIN work?

Most UK businesses use Chip and PIN technology because of the added security and convenience. The Chip and PIN payment system is quite a straightforward procedure as we will demonstrate in our step-by-step guide.

The card holder’s transaction can be completed in three easy steps:

  1. Insert card - when a customer is ready to make a payment, direct them to insert their debit or credit card into your card terminal
  2. Enter secure PIN - once the total appears on the display, your customer will be prompted to enter their unique four-digit PIN (Personal Information Number) using the keypad. This PIN is the same number that is stored on the microchip of their card
  3. Bank approval - once the correct PIN has been verified by the device, payment will be authorised and a receipt will be processed as proof of payment

Your customer’s payment should reflect in your business account within three to five working days.



Graphic of Card Payment Machine with card in it

Types of Chip and PIN machines

If you’re a business owner or entrepreneur and you need to process a credit or debit card in person, then you will need a Chip and PIN machine.

There are three main types of Chip and PIN machines available: countertop, portable and mobile Chip and PIN machines.

Choosing the right type of card machine will depend on what you need it for, so we’ve elaborated on each machine’s functionality and features so that you can make an informed decision.

Countertop Chip and PIN machines

A countertop Chip and PIN machine is suitable for businesses who prefer to accept payments from a fixed location within their premises.

The device is ideal for small stores, salons or eateries where the cashier is located behind a till. The countertop Chip and PIN can process transactions from a fixed point on the premises.

The terminal requires a cable connection, which can be linked to either the phone line or Wi-Fi network.

Countertop Chip and PIN machines are always connected directly to a power supply so they don’t need to be charged, however they cannot be used away from the designated till point.



Two women in a shop at the counter processing a payment



Portbale Chip and Pin Machine


Portable Chip and PIN machines

Portable Chip and PIN machines, as the name suggests, allow the business owner or their staff to take the terminal directly to the customer via a Bluetooth or Wi-Fi connection.

The ease of convenience makes it the perfect option for restaurants and cafés who need a little more flexibility when it comes to accepting card payments.

Each portable device includes a base unit, which has to be connected to an electrical power supply in order to charge the machine. For most portable Chip and PIN machines, payments can be made up to 100m from the base unit, however this can differ depending on the model.

Mobile Chip and PIN machines

Mobile Chip and PIN machines have the advantage of being able to accept card payments almost anywhere. This type of terminal uses a built-in SIM card and roaming GPRS connection to connect to the strongest available mobile network.

The mobile option functions throughout the UK (provided the mobile connection is good) and is suitable for business owners on the go, such as travelling tradespeople and market vendors. This machine also comes with a base unit for charging.


Handepay Mobile Card Payment Machine

How much do they cost?

The cost of a Chip and PIN machine will depend on which device works best for your business, and the merchant provider you choose. The total cost will include the monthly price of the machine, coupled with transaction fees.

When did Chip and PIN start

Chip and PIN technology was first introduced in 2004 in an effort to deter credit card fraud.

Aiming to replace the less-secure magnetic stripe card type, Chip and PIN introduced a safer way to pay. It has since been adopted on a global scale, with card payments hugely outperforming cash in recent years.

By 2016, the UK Cards Association reported that Chip and PIN accounted for 65% of all UK card purchases (although this is slowly but surely expected to be surpassed by contactless).


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Question mark and speech bubble

What are the benefits for Chip and PIN for businesses?

Chip and PIN machines are a great benefit for businesses of all types. The technology provides a safer and more secure method of payment in the following ways:

  • It’s arguably faster than handling cash - reducing wait/queue times.
  • It’s also much more secure, as it alleviates the need to keep a high amount of cash on site, so to speak.

In addition to the security benefits, Chip and PIN provides added convenience.

Contact Handepay to find out more about Chip and PIN machines

Find out more about Chip and PIN machines with Handepay. We provide a variety of cost-effective card payment services for businesses.

Choose from a range of card-reading machines in our range of terminals, which all come equipped with contactless payments as standard.


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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.