Choosing Payment Tools for a Small Shop

Start with how your customers actually pay

Before you compare a single rate, spend an hour with your own sales records. What proportion of your takings comes in as cash, and what arrives by card? What is your average transaction value? A café selling £4 coffees and a furniture restorer taking £600 deposits need very different tools, and a deal that suits one will quietly drain the other.

Also note the awkward cases. Do you take payments over the phone? Do you hold deposits for bookings? Do you sell the occasional item on a market stall where there is no mains power and the mobile signal is patchy? Write these down before you look at any pricing page, because they are the details that decide whether a reader is genuinely useful or just sits in a drawer.

Transaction fees: the headline rate is not the whole story

A rate of "1.4%" sounds cheaper than "1.75%", but the percentage is only half of the calculation. Most card readers charge a percentage plus a fixed pence amount, and for small basket sizes the fixed fee is what really bites.

Work through a realistic month. Say you take 400 card payments averaging £22, so £8,800 in card takings. At 1.75% plus 10p you pay £154 in percentages and £40 in fixed fees — £194. At 1.4% plus 20p you pay £123.20 plus £80 — £203.20. The "cheaper" rate costs you more, because your average sale is modest.

Then check the things that sit outside the headline rate:

• Card type pricing. Consumer debit cards are usually cheapest; credit, commercial and premium cards can carry a higher rate. Ask what happens when a customer taps a business credit card.
• Keyed-in payments. Taking a card number manually over the phone typically costs more, sometimes considerably more.
• Monthly fees and minimums. Some providers charge a monthly service fee or a minimum monthly processing charge that applies even in a quiet January.
• Settlement timing. Money that lands the next working day is worth more to your cash flow than money that arrives in five.
• Chargeback and dispute fees. Usually £15–£25 per case, charged whether you win or lose.

Refunds, chargebacks and the messy bits

Please test the refund flow before you commit, not during your first unhappy customer. On many contracts, refunding a sale does not return the original transaction fee. You refund the full amount to the customer and still pay the processing cost. On a £200 refund that is a small sting; do it twenty times a month and it is a real cost.

Ask how partial refunds work, whether you can refund from a phone as easily as from the till, and how long a transaction stays refundable in the dashboard. If your shop takes bespoke orders with deposits, you may need to refund just the deposit — not the whole sale.

For chargebacks, find out how you submit evidence. A system that lets you upload a signed order form, delivery confirmation and message history in a few clicks is worth a slightly higher rate. If the process is an email to a support address, you will lose disputes simply through the effort involved.

Device compatibility and your counter setup

A card reader has to live in your actual shop. Check these before buying:

• Power and connectivity. Does it run on Wi-Fi, a SIM, or both? If your broadband drops out on a Saturday, does the reader fall back to mobile data or store payments for later?
• Phone or tablet pairing. Some readers only work with one mobile operating system. Confirm yours is supported before you buy the hardware.
• Till integration. If you use an electronic point of sale, ask whether the reader talks to it directly or whether you will be keying amounts into two devices. Duplicate entry wastes time and causes mistakes.
• Receipts and printers. Do you need printed receipts, or is email and text enough? Printing means paper rolls, a printer and a cable.
• Battery and screen. For market traders, battery life and a screen readable in daylight matter more than anything on the pricing page.

Online gateways that match the shop floor

If you sell online as well, ask whether the same provider can handle both, and whether using one provider for both reduces your rates. A hosted checkout page is quick to set up; an integrated gateway gives you more control over the customer journey and usually better conversion.

Check the practicalities: whether you can take pay-by-bank transfers as well as cards, how refunds are handled on the website side, and what fraud checks are included rather than sold as an add-on. Card data rules — the PCI DSS requirements — apply to you either way, but a provider that handles most of it for you saves a great deal of paperwork.

A short checklist before you sign anything

Ask each provider, in writing:

• What is the total cost for a typical month, based on my real transaction numbers?
• What does a refund cost me, and is the original fee returned?
• When does money reach my bank account?
• Is there a contract, a notice period, or an early exit charge?
• What happens if the machine breaks — how fast is a replacement, and am I charged for it?
• Can I export my sales data into my accounting software without retyping it?

Run one of these tools alongside your current setup for a month if the provider allows it. Real transaction data will tell you far more than any comparison table — and it will show you whether the promised rate actually appears on your statement.