How do card readers work?

Published: 13/08/2021

card reader is another name for a card machine. It lets you process card payments in your business quickly and easily. You might have also heard it called a PDQ machine, a chip and PIN machine or a card terminal. They all do the same thing though – let you take safe, secure card payments.

How do they work?

They use a few different types of technology. Let’s take a look:

Contactless payments.

Contactless technology is an easy and quick way for you to accept card payments, and when the COVID-19 pandemic hit, it became very popular, very quickly.

In fact, regulators quickly increased the contactless limit to £45 when COVID hit, and that’s due to be increased further to £100 in late 2021. And according to Barclaycard, contactless payments soared in 2020 to make up almost 90% of all card transactions.

How does contactless work?

In a nutshell, it lets customers pay for items up to £45 (currently), without entering their PIN number. Instead, they just tap their card on the card reader to process a payment. Easy!

So what’s behind the technology? Well, it uses something called Radio Frequency Identification (RFID). This means your customer can just hold their card a few centimetres away from the card reader, which recognises the signal, communicates with the card and processes the payment. They can tap and go.

Mobile wallet payments.

Customers can pay for items using their smart device if they have a mobile wallet set up.

How does it work?

Mobile wallet payments like Apple Pay, Google Pay and Samsung Pay all work in a similar way as contactless cards, but instead of RFID, they communicate using Near Field Communication (NFC) instead. You can hold your phone, watch, or whichever smart device you have a mobile wallet on, close to the card reader, and it’ll communicate with the device to process the payment.

Mobile wallets are really secure, as they use complex encryption and tokenisation to process specific transactions, using your card that’s already encrypted and stored in your mobile wallet.

Chip and PIN technology.

Introduced to the UK in 2006, chip and PIN used to be the most common way to pay.

It was designed for security and to help combat card payment fraud. It replaced the old magstripe technology, where you’d have to swipe a card and the customer would sign their signature to authorise the payment. As you can imagine, this left people vulnerable, as if a card was stolen, the thief could easily forge the signature.

With chip and PIN, a customer puts their debit or credit card into the reader and is asked to enter in a 4-digit PIN code, which is secret to them. The card’s chip interacts with your card reader to start the payment process and verify it.

It’ll send the securely encrypted transaction data to your merchant account. It’s here where the payment is approved and processed, before the funds are transferred to your business bank account.

How can I get a card reader?

We make it easy. Whether you’re new to cards, or are looking to switch provider, we’ve got a team of local payment consultants who can pop into your business to really learn what it’s all about.

They’ll work with you to create a pricing package tailored to your business needs.

We have a range of card readers available to suit all the different businesses out there:

Our card readers come equipped with all the technology we covered in our blog, so you’ll be able to take payments the way you want.

Ready to get started? Just fill in our form to get a quote or give us a call.

 

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