25 May 2023 | Published by Jodie Wilkinson
Whether you’re running a business online or have a physical brick-and-mortar store, there’s no doubt that the Chip and PIN system keeps your business and your customers safe when making transactions.
In the past, businesses had to process payments with bulky machines, which alienated small businesses and pop-up retailers from accepting card payments. Now, you’d struggle to find a company that doesn’t use a Chip and PIN device to process their card payments.
But what exactly is a Chip and PIN machine, and how does it work? Find out more about this revolutionary technology and its benefits to your business.
Chip and PIN machines are card payment devices that allow customers to make in-store transactions using a combination of their credit or debit card and their Personal Identification Number (PIN).
These machines allow customers to pay for goods and services by card, making transactions more accessible and secure. Before introducing the Chip and PIN machine, cards had to be physically swiped through a machine and then signed for with a receipt.
2004 welcomed the introduction of Chip and PIN debit and credit cards, which were embedded with microchips to store data on the card. However, it wasn’t until 2006 that it became mandatory that all British payment cards had a Chip and PIN. 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.
While the rise of contactless transactions has been extremely useful, there are a few instances where you have to use Chip and PIN:
As the name suggests, in addition to the magnetic stripe, all Chip and PIN cards have a microchip inside. This chip stores all of the accounts holders' information, including:
When a customer is ready to pay, they insert their card into the machine; this then reads all of the information and asks the user to input their unique 4-digit PIN.
Once the PIN has been entered correctly, the card machine can talk to the card’s chip to begin processing the payment. This sends the encrypted transaction data to your business’s merchant account, where the cardholder’s bank checks and approves all the payments.
Once the funds have been authorised, the sum will be transferred to your business's bank account within 3 -5 working days.
Depending on your business type, you could benefit from a certain card machine. The three most common devices are:
A countertop card machine is the most common type that you’ll find. They’re usually located in retail businesses, right next to the till.
These devices require a physical connection, so they’ll need to be located next to a mains outlet plugged into a broadband or phone line. This means you’ll only be allowed to serve customers from one area, so ensure that signage is clear.
It’s a great way to take payments if you run a local shop, hair and beauty salon or are an independent retailer.
If you ask for the bill in a restaurant, most of the time, they’ll bring the card machine over to you: this is a portable card machine.
These machines come 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.
A mobile card machine could be ideal if your business keeps you on the move.
You don’t need to worry about any cables or wires. To process payments, this machine uses 3G to connect to the strongest mobile network (Vodafone, O2 or EE). 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.
Chip and PIN technology can offer a wide range of benefits to businesses, including:
Chip and PIN machines provide increased security for businesses and their customers. Unlike a traditional swipe machine that requires a signature, Chip and PIN machines need the customer to insert their card into the machine's chip reader and enter a unique PIN to complete the transaction.
Since the chip on the card is encrypted, it's much harder for fraudsters to clone it. This extra security measure can help protect businesses from card-related fraud, which can be costly to resolve.
Paying by debit or credit card and using a Chip and PIN machine can significantly reduce customer wait times and is generally more convenient. The days of customers having to go to the bank and get out a certain amount of money are long gone.
Instead, customers can simply tap their card to complete a contactless payment or even use their phone.
Customers may feel more confident using a Chip and PIN machine as they know their card details are being securely processed.
This helps build trust and loyalty, as customers are more likely to return to a business that they perceive to be safe and reliable. Businesses can improve their reputation and attract more customers by providing a secure and convenient payment method.
Learn more about turning customers from single sales into repeat shoppers with our guide.
Yes, Chip and PIN machines are a secure payment method that’s much safer than handling cash, which poses the risk of counterfeit notes, fraud and theft.
If there are any problems with payment, the machine will display a notification, and the transaction won’t go through.
Chip and PIN machines also create an automatic audit trail of transactions to give you a complete overview of all card payments, what they are for and the total amount.
While no payment processing system is entirely immune to hacking, Chip and PIN machines are generally considered more secure than traditional methods. That said, it’s still possible for criminals to steal card information or manipulate the machine to steal funds. Hence, merchants must take appropriate security measures to protect their machines and customers.
The cost can depend on a number of things, including which card provider you choose. But we make it easy at takepayments to get started with us.
When you’re ready, one of our local Payment Consultants will come and meet with you to learn more about you and how your business runs. They’ll then 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 are no joining fees when you choose takepayments and no exit fees if you decide to leave at the end of your contract.
Most Chip and PIN machines require an internet connection to process transactions and communicate with the payment processor. However, some devices may be able to function offline for a limited period, depending on their configuration.
Whether you decide to opt for portable, countertop or mobile devices, our card machines for small businesses are equipped to make payments more manageable.