Card payments now account for over 80% of retail transactions in the UK. If your business doesn't accept card payments, you're turning away the vast majority of your potential customers. Whether you sell in-store, online, or take orders over the phone, accepting cards is no longer optional — it's the baseline expectation.
This guide covers everything you need to know about accepting card payments: why it matters, how to get set up, what it costs, and how to choose the right provider for your business.
Why Your Business Needs to Accept Card Payments
The shift from cash to cards has been accelerating for years, and the trend isn't slowing down. Here are the core reasons every business should accept card payments.
Customer Expectations Have Changed
Consumers expect to pay by card everywhere. Contactless payments, Apple Pay, and Google Pay have made tapping a card or phone the default. If a customer reaches the till and sees a "cash only" sign, many will simply leave. The same applies online — shoppers abandon carts when their preferred payment method isn't available.
Increased Sales and Higher Transaction Values
Research consistently shows that customers spend more when paying by card. Without the physical constraint of cash in their wallet, average transaction values increase by 20-30%. Accepting cards also means you never lose a sale because a customer doesn't have enough cash on them.
Faster Payments and Better Cash Flow
Card payments settle directly into your bank account, typically within 1-3 business days. There's no counting cash, no bank runs, and no risk of theft or loss. For businesses that invoice clients, offering card payment means you can get paid immediately rather than waiting 30-60 days.
Reduced Cash Handling Costs
Cash isn't free. There are costs associated with counting, storing, transporting, and depositing cash — plus the risk of human error and theft. Card payments eliminate these overheads and give you a clear, automatic record of every transaction for accounting and reconciliation.
How to Accept Card Payments
There are three main ways businesses accept card payments, depending on whether the customer is physically present or not.
In-Person Card Payments
For face-to-face transactions, you need a card machine (also called a card terminal or PDQ machine). Modern terminals support chip and PIN, contactless, and mobile wallets. Options range from standalone countertop terminals to mobile card readers that connect to your smartphone via Bluetooth.
Popular providers include Square, SumUp, and Zettle, all offering pay-as-you-go pricing with no monthly fees — making them ideal for small businesses and sole traders.
Online Card Payments
To accept card payments on your website, you need a payment gateway. This is the software that securely captures card details, encrypts them, and routes the transaction to the card networks for authorisation. Most e-commerce platforms like Shopify, WooCommerce, and Wix have built-in payment gateway integrations.
For businesses that don't have a website, payment links offer a simpler alternative. You generate a link and send it to your customer via email, SMS, or messaging app. They click the link, enter their card details on a hosted checkout page, and the payment is processed — no website required.
Card Payments Over the Phone
Phone payments (also called MOTO — mail order / telephone order) are common for service businesses, call centres, and any business that takes orders by phone. Traditionally, an agent keys the card number into a virtual terminal. However, this creates PCI compliance challenges because the agent hears and handles the card data.
A more modern approach is to send the caller a payment link via SMS during the call. The customer completes payment on their own device, keeping card data out of your phone system entirely and significantly reducing your PCI scope.
Card Payment Processing Fees Explained
Every card payment involves several parties — the card networks (Visa, Mastercard), the issuing bank (the customer's bank), and the acquiring bank (your bank). Each takes a small cut, which is why card processing fees exist.
The main components of card processing fees are:
Interchange fee: Paid to the customer's bank. Typically 0.2% for debit cards and 0.3% for credit cards in the UK (capped by regulation).
Scheme fee: Paid to Visa or Mastercard for using their network. Usually a few pence per transaction.
Acquirer/processor markup: The margin charged by your payment provider on top of interchange and scheme fees.
In practice, most small businesses pay a blended rate of 1.4-2.5% per transaction, depending on their provider and whether the transaction is in-person (lower risk, lower fee) or online (higher risk, higher fee). Some providers charge a flat rate — for example, Stripe charges 1.5% + 20p for UK cards online. Others use interchange-plus pricing, which passes through the actual interchange cost plus a fixed markup.
Watch out for additional fees like monthly minimums, PCI non-compliance fees, chargeback fees, and early termination penalties. Always read the full fee schedule before signing a contract.
Card Machines vs Payment Links
The traditional way to accept card payments in person is with a card machine. But payment links are increasingly being used as a flexible alternative — or complement — to physical terminals.
Card machines are best for high-volume retail environments where speed matters. Contactless tap-and-go takes seconds. However, terminals involve upfront hardware costs (£19-£300+), may require a contract, and need maintenance.
Payment links are best for service businesses, remote payments, phone orders, and situations where you don't have (or don't want) a terminal. There's no hardware cost, and the customer completes payment on their own device. They're also ideal for taking payments in-store without a card machine — for example, using QR codes at the point of sale.
Many businesses use both: card machines for walk-in customers and payment links for phone orders, deposits, and remote payments.
How to Choose a Card Payment Provider
Choosing the right provider depends on your business model, transaction volume, and how you sell. Here's what to evaluate:
Pricing model: Flat-rate pricing (e.g. 1.75% per transaction) is simple and predictable. Interchange-plus is usually cheaper at higher volumes but more complex to understand.
Contract terms: Some providers lock you into 12-36 month contracts with early termination fees. Others are rolling monthly or pay-as-you-go.
Settlement speed: How quickly do funds reach your bank account? Next-day settlement is now common, but some providers still take 3-5 days.
Payment channels: Does the provider support all the ways you take payments — in-person, online, over the phone, and via payment links?
Integration: If you run a platform or software product, look for providers with strong APIs that let you embed payments directly into your product.
Support: When payments stop working, you need someone to pick up the phone. Check whether support is UK-based, what hours they operate, and what channels are available.
You can compare popular payment providers on our directory to see how they stack up across features, pricing, and supported payment methods.
Security and PCI Compliance
Any business that accepts card payments must comply with the Payment Card Industry Data Security Standard (PCI DSS). This is a set of security requirements designed to protect cardholder data.
The good news is that for most small businesses, PCI compliance is straightforward if you use a reputable payment provider. Here's why:
Hosted checkout pages and payment links mean card data never touches your servers. The provider handles capture, encryption, and storage.
Card machines are PCI-certified hardware. As long as you use them as intended and don't store card data separately, compliance is handled.
Phone payments are the exception. If agents read card numbers aloud and key them into a system, your call recordings may contain card data — putting you in scope for more stringent PCI requirements. Using payment links sent via SMS during the call avoids this entirely.
Most providers will charge a PCI non-compliance fee (typically £5-30/month) if you don't complete their annual PCI self-assessment questionnaire. Make sure you complete it — it's usually a simple online form.
Accepting Card Payments on a Platform or Marketplace
If you operate a platform, marketplace, or SaaS product where your users need to accept card payments, the challenge is different. You're not just processing your own transactions — you need to enable embedded payments for potentially thousands of merchants.
This means handling merchant onboarding, KYC (know your customer), split payments, settlement to multiple bank accounts, and compliance — all within your product experience. Solutions like Stripe Connect, Adyen for Platforms, and Shuttle's payment infrastructure are designed for this use case.
The key considerations for platforms include:
White-label vs redirect: Can your merchants accept payments under your brand, or are customers redirected to a third-party checkout?
Payment method coverage: Beyond card payments, do your merchants need direct debit, bank transfers, or local payment methods?
Revenue share: Can you earn a margin on payment processing, turning payments into a revenue stream for your platform?
Frequently Asked Questions
How much does it cost to accept card payments?
For most small businesses, card processing fees range from 1.4% to 2.5% per transaction. The exact rate depends on your provider, the type of card (debit vs credit, UK vs international), and whether the payment is in-person or online. Some providers also charge monthly fees or require a minimum monthly spend. Pay-as-you-go providers like Square and SumUp charge a flat percentage with no monthly commitment.
Can I accept card payments without a card machine?
Yes. Payment links let you accept card payments without any hardware. You generate a link through your payment provider and send it to the customer via email, SMS, WhatsApp, or any other channel. They tap the link, enter their card details on a secure hosted page, and the payment is processed. This works for remote payments, phone orders, invoices, and even in-person transactions using QR codes.
How long does it take to set up card payments?
With modern providers, you can start accepting card payments within minutes. Services like Square and Stripe offer instant onboarding — you create an account, verify your identity, and you're ready to take payments. Traditional merchant accounts from banks can take 1-2 weeks to set up due to underwriting and compliance checks.
Do I need PCI compliance to accept card payments?
Yes, all businesses that accept card payments must be PCI compliant. However, if you use a hosted checkout, payment links, or a card machine from a PCI-certified provider, the heavy lifting is done for you. You'll typically need to complete an annual self-assessment questionnaire (SAQ) to confirm you're following basic security practices. Read our guide to PCI compliance for a full breakdown of what's required.
Getting Started
Accepting card payments is essential for any modern business. The barriers to entry are lower than ever — you can be up and running in minutes with no upfront costs and no long-term contract.
For individual businesses, the choice comes down to how you sell and what you're willing to pay in fees. For platforms and software companies looking to enable card payments for their users, the decision is more nuanced — you need infrastructure that handles onboarding, compliance, and settlement at scale.
Start by comparing payment providers to find the right fit, or explore embedded payment solutions if you're building payments into a platform.