What is a credit card machine?

You’ve used a credit card machine before, whether you realized it or not. It’s that familiar card payment machine at the front checkout of your favorite coffee shop. It’s that portable payment terminal they bring to your table at the restaurant and guilt you into a 25% tip.

A credit card machine is just the technical name for the device that businesses use to accept in-person card payments, whether at your store or on-the-go.

So, what exactly does a credit card machine do?

Put simply, a credit card machine acts as the middleman that initiates the transfer of money from your customers bank to your bank when they pay by card. Now despite the name “credit card” machine, they almost always accept debit cards as well—sometimes even gift cards.

The process behind how it gets the money from your customer to you is actually quite simple. When the customer swipes, taps, or inserts, the machine interprets the customer's bank information, verifies the transaction, and then completes the payment by initiating a transfer of funds from the customer’s bank account to your bank account.

Card reader vs. credit card machine

You may hear card reader and credit card machine used interchangeably, but there are some key differences.

A card reader is more basic, but still takes payments just the same. On its own, it's a small device with a swipe, chip, and/or tap option—maybe a keypad and small screen. When you connect it to a smartphone, tablet, or computer, it transforms into a powerful tool. The card reader itself reads the information on the customer's card and then passes the data to the connected device where the payment is fully processed.

A credit card machine, on the other hand, is an all-in-one device. It has the functionality of a card reader built in but with an added feature to fully process a payment on the machine itself—no connected devices required. These are the machines you often see at a restaurant. They will typically have a keypad or touchscreen, display screen, and printer for receipts.

To help you visualize it, here is the difference between our Helcim Card Reader and our Helcim Smart Terminal (a credit card machine):

What you need to use a credit card machine

Being a standalone device, credit card machines really don’t need many auxiliary components. But there are a few essentials to be aware of before you dive into it:

1. Make sure you have internet connection

Your credit card machine needs to connect to a network so that it can process the payment. Most modern payment machines will connect via Wi-Fi or cellular data. Some of the older machines will require you to plug into an ethernet cable.

2. Keep the batteries charged

Portable credit card machines have batteries that need to be maintained. Most will come with a charging cable that you can plug in every night after you close. Again, if you go with an older machine, it may not be portable and require you to stay plugged into an outlet at all times.

3. Sign up for a merchant account

No credit card machine will work without signing up for a merchant account with a reputable payment company, like Helcim. A merchant account is essential to processing the payment and transferring funds from your customers bank to your bank.

The typical lifespan of a credit card machine

You can expect modern credit card machines to last about 10 years under normal processing conditions. With technology moving so fast these days, you may notice it gets frustratingly slow compared to the newer models. Or it may start to lack the features of the latest and greatest machines.

Here are a few common signs it’s time for an upgrade:

• It doesn’t accept certain major credit cards
• It doesn’t accept the latest payment technology, like digital wallets
• The chip or tap takes a couple tries to work
• Processing times are beginning to feel like a lifetime
• You were quoted repairs that cost almost as much as a new machine

If you've noticed that your credit card machine has started slowing down a few years after purchase, it might be due to physical damage. Accidents can affect its functionality - maybe the device got dropped, something spilled on it, or it was handled a bit too roughly. Additionally, if you don't clean the card reader and keypad regularly, dirt can build up and cause malfunctions. By taking a little time to care for your credit card machine, you can extend its lifespan, keep it running smoothly, and avoid needing to replace it so often.

How to use a credit card machine

No two credit card machines are the same, but most will follow a few common steps:

1. Get a merchant account: Sign up with a payments company, like Helcim, and purchase a credit card machine.
2. Power it on: Plug it in or make sure your payment machine is charged.
3. Connect to a network: Most portable credit card machines need a connection to Wi-Fi or cellular data.
4. Enter the transaction amount: Use the keypad or touchscreen to key in the amount of the transaction.
5. Swipe, insert, or tap: Get the customer to swipe, insert, or tap their debit card or credit card.
6. Verify and confirm: The payment machine may ask the customer for their PIN or signature. Once verified, the transaction will process.
7. Print or email the receipt: Offer to print or email the receipt to your customer, depending on the features of your specific machine.

How much does a credit card machine cost?

The cost of a credit card machine varies across payment companies. Most modern companies will charge a one time fee or let you pay in installments. Unfortunately, there are still some companies stuck in the past who will lock you into a contract and charge you a credit card machine rental fee.

Renting might seem like a good deal at first since the monthly cost is cheaper than a one-time purchase. But here's the catch: these companies usually require a 3 to 4 year contract for their merchant account. And remember, a credit card machine can't work without a merchant account. As a result, when you add it up, the actual cost can be way more than you expected (monthly fee x 36 months). We recommend you avoid renting at all costs, as it can be hard to escape when things start to go bad.

Here’s an idea of what you can expect for pricing across some of the bigger players in the industry:

FAQs

Does a credit card machine need a phone line?

Some of the more ancient credit card machines might. But you’re better off with something modern that uses Wi-Fi, Ethernet, or cellular data.

Do credit card machines need an internet connection?

Yes! Credit card machines need to connect to some form of internet in order to process the payment on the spot. Although some machines have an offline mode, none of these transactions will be processed until the machine has an internet connection. Offline mode simply stores the data until a connection is made.

Do card machines need electricity?

Yes, they do. Some may require it to be plugged into a power source at all times. Portable credit card machines have rechargeable batteries that need to be plugged in for a charge once in a while.

Can you use a debit card in a credit card machine?

You sure can! With “credit card” in the name, it may be confusing, but these devices act as debit card machines as well.

Do credit card machines hold data?

Credit card machines generally do not hold sensitive customer data for extended periods. Instead, they may temporarily store authorized transaction data until it is securely transmitted to the payment processor. This data is typically encrypted to protect against unauthorized access.

POS (Point of Sale) software is typically the system that holds transaction and customer data. This data is used for reporting, providing insights into sales trends, inventory levels, and customer behavior.

Understanding credit card machines is essential for any small business owner. These devices are the backbone of modern in-person payments. Whether at your store or on-the-go. It ensures that transactions are smooth, secure, and fast.

For more information on credit card machines, feel free to contact Helcim. We’re here to help you find the perfect payment solution for your business needs.