How does a chip and PIN machine work?

Rachel Joseph Card Machine

How does a chip and PIN machine work?

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Chip and PIN is the technology that lets your card machine take payments safely from your customers using their credit card or debit card.

First brought into the UK in 2006, it was introduced to replace the old and slow magnetic swipe method.

Remember when you used to have to physically swipe a card through the machine, then ask the customer to sign the receipt when it had printed? You’d then have to compare the signature against the one on the back of the credit and debit card to make sure they matched.

Not only did that mean that is was a slow procedure and it could cause long queues, it was also an unsecure way to take a payment. If a customer lost their card or if it was stolen, it meant that their signature could be easily forged to make a payment.

That’s why chip and PIN was brought in. It was designed with security in mind, to make card transactions more secure for both customers and business owners.

In fact, annual counterfeit card fraud losses dropped by a whopping £81.9 million between 2004 and 2014, showing the difference chip and PIN made.

How do chip and PIN machines work?

First, there’s a clue in its name. All credit cards and debit cards have a chip inside them, which securely holds a customer’s payment information.

So, when they’re ready to pay, they just put their card into the chip and PIN machine. They’ll then need to enter their 4-digit PIN, which is something that’s unique to themselves.

Once the correct PIN has been entered, this allows the card machine to talk to the card’s chip to begin processing the payment. This sends the encrypted transaction data to your business’ merchant account, which is where all the payments are checked and approved by the cardholder’s bank.

Once it’s authorised, the funds will be transferred to your business bank account which takes 3 to 5 days.

What’s even better is that this is all done automatically for you in just a few seconds!

The different types of chip and PIN machines.

There are different types available to suit a variety of businesses:


This machine is the one you’ll find in most retail businesses, right next to the till.

It does what it says on the tin; it works from your countertop. It needs to be plugged into the mains, so you can only serve customers from one area.  And it’ll need to be plugged into your broadband or your phone line too.

It’s also a great way to take payments if you have a local shops, hair and beauty salons and independent retailers.


When you’ve asked for the bill in your local restaurant, they usually bring a card machine over to you. That’ll be a portable one.

It comes in two parts; a chip and PIN card reader and a base. The card reader uses Bluetooth technology to connect to the base to take payments. So, as long as you’re within 50 metres of the base, you can use it to process a payment at the bar, around the shop floor or at the table.

It’s the perfect solution if you manage a hospitality business, like a pub, a café or a restaurant.


Does your business keep you on the move? A mobile card machine is ideal for you.

You don’t need to worry about any cables or wires. This machine works using 3G to connect to the strongest mobile network (Vodafone, O2 or T Mobile), to process payments. This means you can take card payments from anywhere in the UK where you have a signal.

If you’re a mobile business, like a caterer, courier, taxi or mobile beautician, it’s a great way to take payments.

How much does a chip and PIN machine cost?

The cost can depend on a number of things, including which card provider you choose. We make it easy to get started with us.

When you’re ready, one of our local Payment Consultants will come and meet you to learn more about you and how your business runs. They’ll then work together with you to create a personalised pricing package based on your needs.

If you want to take contactless payments, there’s no extra cost to get this on your machine. All our card machines come with contactless, Apple Pay, Android Pay (Google Pay) and Samsung Pay already set up.

There’s no joining fees when you choose takepayments, and no exit fees if you choose to leave at the end of your contract.

Interested in getting a chip and PIN machine? Just fill in our form to get a quote or give us a call.

Get your FREE quote today.

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