The overall cost of a chip and PIN machine will depend on the deal you negotiate with your merchant services provider and the number and type of transactions which take place each month.
Fees you should be aware of
Transaction Fee: The % or fixed cost per transaction. The transaction fee is often different for in person payments and payments made over the phone and internet (card not present).
Minimum monthly service charge (MMSC): The merchant aquiring bank will charge a minimum monthly service charge. If the total transactions fees are below the MMSC, the MMSC will be applied. Eg. If your transaction fees are £15/ month and the MMSC is £20/ month you will pay £20. If you are a small business this can be significant.
Setup fees: Sometimes referred to as joining/ application/ activation fees these are fees for setting up a new account. They can be quite high so if you are unsure check if these fees are applicable.
Cost of initial purchase or rental: For many businesses it works out cheaper to rent a terminal. Make sure you get the best deal and be aware that new technologies such as contactless and mobile payments will soon be common.
How fees are calculated
- The card association such as Visa or Mastercard will set the fees for their third party processors.
- The third party processors will set the fees for your business based on their own calculations. They look at factors such as risk, company credit history, type of business, how the business operates and set their fees.
- Don’t be afraid to negotiate with the payment processors for the best deal on everything from terminals to setup fees, transaction fees and the minimum monthly service charge.
- It is also worth doing business with a reputable provider to reduce your risks so check online before you sign anything.