A card reader is a small device that reads a customer's chip, contactless card or phone wallet and passes the payment to an acquirer for authorisation. For a UK small business it is the cheapest way into card acceptance: readers on this index start at 11 pounds plus VAT, and several providers charge no monthly fee at all for the account behind them.
What the reader does and what it does not
The reader captures the card and encrypts it. Everything else, the authorisation, the fraud checks and the settlement of your money, happens at the acquirer behind it. That is why two readers that look identical can cost very different amounts to run: you are buying the acquirer, and the plastic in your hand is a peripheral. It also explains why a reader from one provider will not work on another provider's account.
Bluetooth, wifi and 4G, and when each fails
Bluetooth readers pair to a phone or tablet and rely on that device's connection, which is fine in a shop and awkward at a market stall with poor signal. Wifi readers need a network on site. Machines with their own SIM work anywhere with mobile coverage and cost more up front. Zettle prices its wifi and 4G terminal separately from its Bluetooth reader for exactly this reason.
Published reader prices, as they stand
Tide lists the Nano from 11 pounds plus VAT and the Card Reader from 69 pounds plus VAT. myPOS prices the Go 2 at 39 pounds excluding VAT and the Ultra at 179 pounds excluding VAT. Zettle starts at 29 pounds excluding VAT for new business users. Elavon's Start Simple plan carries a 5 pounds one-off device cost. Delivery and VAT are extra on most of these and the pages say so.
Questions people ask about card reader for small business
What is a card reader, exactly?
A card reader is the device that captures a card at the point of sale: chip and PIN, contactless, or a phone wallet held against it. It does not hold your money or set your price. The account behind it, run by an acquirer, decides both.
Do card readers need a phone?
Bluetooth readers do, because the phone or tablet carries the app and the connection. Standalone machines with their own screen, keypad and SIM do not. If you take payments away from wifi, the standalone machine costs more and saves the argument.
Can I use a card reader for a charity or a club?
Yes. Several providers on this shelf onboard charities and clubs on the same terms as businesses, and some publish charity specific pricing. The account still needs the same identity checks, and the rate you pay is the rate on the plan you sign, not a charity discount unless the page says so.