Credit card machine vs card reader: A closer look into POS hardware options

Not sure if you need a card reader or a credit card machine? Take this quick quiz!

Choosing the right payment tool for your business can feel overwhelming, but don’t worry—we’ve made it simple. Answer the questions below, and we’ll help you figure out whether a card reader or a credit card machine is the perfect match for your business needs.

Where do you process payments most often?

• A: At a fixed location like a storefront or office.
• B: On the go, at markets, events, or different customer locations.

Do you need to print physical receipts for your customers?

• A: Yes, my customers often ask for printed receipts.
• B: No, digital receipts (email or text) are enough.

How important is portability to you?

• A: Not important—I process payments in one place.
• B: Very important—I need to accept payments anywhere.

What’s your budget for payment tools?

• A: I can invest in a higher-cost device with more features.
• B: I prefer a more affordable option while I grow my business.

Do you need a standalone device that doesn’t rely on other hardware (like a phone or tablet)?

• A: Yes, I want an all-in-one solution.
• B: No, I’m comfortable pairing with my smartphone or tablet.

Results:

Mostly A’s: Credit Card Machine Maestro

A credit card machine is likely the best fit for your business, especially for facilitating credit card payments. It’s ideal for fixed locations, offers built-in receipt printing, and doesn’t require additional devices to operate. If you prioritize reliability and professional functionality for your storefront, this is your match.

Mostly B’s: Card Reader Pro

A card reader is perfect for businesses on the move or just starting out. It’s lightweight, portable, and connects seamlessly with your smartphone or tablet. If affordability and flexibility are key, the card reader is your go-to tool.

Now that you know which payment tool suits your business, let’s explore the differences between them in detail and understand the benefits of each option.

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Defining the basics: Vocabulary you should know

Before diving into comparisons, let’s define some essential payment processing terms:

• Credit card machine: A standalone device that directly processes payments. Often referred to as a credit card terminal, it typically includes features like receipt printing and multiple connectivity options. It simplifies the payment process by streamlining transactions and enhancing operational efficiency.
• Card reader: A compact, portable device that connects to a smartphone, tablet, or computer to process payments through an app.
• POS (Point of Sale): A system used to manage sales. It combines hardware (like a card reader or terminal) with software for inventory, reporting, and payment processing.
• Tap to pay (or Tap on Phone): A contactless payment method where customers use an NFC-enabled card, smartphone, or wearable device to complete transactions.
• PCI-DSS compliance: Short for Payment Card Industry Data Security Standard, this is a set of security requirements that businesses must follow to protect cardholder data and ensure secure payment processing.
• Customer data: Refers to sensitive information collected during credit card transactions. Protecting customer data through measures like EMV compliance and encryption is crucial for maintaining trust and security in payment processing.
• NFC (Near-field communication): A wireless technology enabling contactless payments by simply tapping an NFC-enabled card, smartphone, or smartwatch on a compatible device.
• EMV (Europay, Mastercard, Visa): The global standard for secure card transactions using embedded microchips. EMV reduces the risk of fraud and offers a higher level of security than magnetic stripe cards.
• End to end encryption: A security feature that ensures data is encrypted from the point of entry to the final destination. End-to-end encryption is vital for protecting customer data and ensuring compliance with security standards in payment processing.

What is the difference between a card reader and a credit card machine?

The key difference lies in setup and functionality:

Credit card reader

• Function: Requires a smartphone, tablet, or computer with a POS app to process payments.
• Deployment: Connects via bluetooth, AUX cord, or USB cable
• Cost: Generally more affordable and entry-level for people looking to just get started. Can go anywhere around $50-$400.
• Print receipts: No

Credit card machine

• Function: An all-in-one device that processes payments and prints receipts without needing additional hardware.
• Deployment: Standalone
• Cost: $$-$$$ Higher initial cost but provides a complete all-in-one solution. Can go anywhere around $299 and up.
• Print receipts: Yes

Do credit card machines or card readers charge a fee?

Yes, credit card machines—and card readers—often come with processing and equipment fees. The exact costs depend on your payment provider and can include the following:

• Transaction fees: A percentage of each sale. Some providers use fixed-rate pricing, while others, like Helcim, use an interchange-plus pricing model. This model gives you access to the true wholesale cost of the transaction with a small, transparent margin that decreases as your business processes more.
• Monthly fees: Many providers charge monthly fees for payment services or equipment rentals. However, Helcim stands out by eliminating monthly fees, making it a more cost-effective choice for businesses of all sizes.
• Equipment costs: The cost of your credit card machine or card reader will depend on whether you choose to buy or lease. Some providers also charge setup fees, so be sure to ask about these upfront. With Helcim, you get to own your Smart Terminal or Card Reader at an affordable price without the shady contracts or lock-in periods. You can even purchase the Smart Terminal in 12 monthly installments so it doesn't hurt up front.
• Early termination fees: Some providers may charge a penalty if you cancel your contract early. Helcim, however, offers no contracts and no hidden fees, giving you the flexibility your business deserves.

While fees are unavoidable, knowing what they are—and how they vary across providers—helps you make an informed decision. The right provider will offer not only transparent pricing but also added value, such as better rates for higher processing volumes or no unnecessary fees.

Is it worth getting a card reader?

While less robust than credit card machines, card readers provide convenience and affordability, making them a valuable tool for many businesses. Card readers are perfect for:

• Small or mobile businesses, like food trucks or pop-up shops.
• Entrepreneurs just starting out and seeking a budget-friendly payment option.
• Businesses that need flexibility to accept payments anywhere.

Alternatives to card readers and credit card machines: Tap to Pay

While card readers and credit card machines are excellent options for accepting in-person payments, you may still be thinking “is there a way I can just accept payments on my phone?” The world can be a wish-granting factory. Enter Tap to Pay. This technology takes simplicity to the next level. If you’re looking to accept card payments without needing an external device, Tap to Pay is a game-changer. It allows you to accept contactless payments directly on your smartphone or tablet, eliminating the need for additional hardware.

Benefits of Tap to Pay

• Cost-effective: No upfront costs for hardware—your smartphone becomes the payment device.
• Portable: Accept payments anywhere your phone goes, making it perfect for mobile businesses.
• Convenient: Easily handles contactless payments securely and efficiently.
• Eco-friendly: Reduces the need for physical receipts and additional devices, supporting sustainable practices.

Considerations for Tap to Pay

While Tap to Pay offers unparalleled simplicity, there are a few limitations to keep in mind:

• Transaction limits: Some payment providers may impose limits on the maximum amount you can process in a single transaction.
• NFC reliance: Tap to Pay depends on NFC technology, meaning it can’t process magstripe-only cards or certain non-NFC payments, such as HSA (Health Savings Account) cards.

Tap to Pay on iPhone on the Helcim app

Tap to Pay on iPhone is available on the Helcim POS app and it transforms your smartphone into a powerful payment processor. With built-in NFC technology, you can securely accept payments from credit cards, Apple Pay, and Google Pay—all with just a tap. No extra hardware. No monthly fees. Just a seamless way to process payments directly from your device.

Still unsure? Here’s what we recommend

Choosing the right tool depends on your business model and needs. Here are some options to help you decide:

Final thoughts

Understanding the differences between credit card machines, card readers, and even POS systems can save your business time, money, and headaches. Whether you’re a mobile entrepreneur, retailer, or startup, there’s a payment solution tailored to your needs, enhancing customer satisfaction through efficient payment processing, quick transaction times, and robust security features.

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FAQs

Can a credit card terminal work offline?

Some credit card terminals can process payments offline by storing transaction data temporarily and syncing it once the device is back online. However, this feature depends on your payment provider and the terminal model. Keep in mind that offline processing may come with certain risks, such as declined payments once transactions are submitted.

Can I use a credit card machine with a POS system?

Yes, many businesses use standalone credit card machines alongside POS systems. For example, a restaurant might use a POS system for managing orders and a separate credit card machine for faster payment processing at the table.

What’s the lifespan of a credit card machine or terminal?

Credit card machines typically last 5-7 years with proper care. However, upgrades may be needed sooner to comply with new security standards, support updated technology (like EMV or NFC), or meet customer demands for faster and more convenient payment options.

Do POS systems require specific hardware to function?

Not always. Many modern POS systems operate entirely on tablets or smartphones, paired with portable card readers. They may also have embedded virtual terminals in it, reducing the need of hardware as you can manually input the credit card information of your customer. However, not all POS systems work with generic hardware. For example, the Helcim Card Reader works exclusively with the Helcim app, while the Helcim Smart Terminal can integrate with third-party POS systems via the Smart Terminal API. Always check hardware compatibility to ensure it meets your business needs.