Business

How to choose the right payment terminal for your business

September 15, 2021 by Mark Davis

The use of payment terminals - bank card readers or ‘CB machines’ as many of us will know them - continues to grow and grow in France. In 2013 there were already 1.3 million of them in circulation and today that figure is over 2 million and rising.

We’ve reached the point now where using these card readers has become the default means of payment in most shops. Cash seems to have had its day. For shop owners, tradesmen or taxi drivers, it’s no longer a matter of ‘do I need a payment terminal?’ The question now is ‘which payment terminal do I need?’

And that’s the question this article will answer.

1. Understanding payment terminals

1.1. Why do businesses need them? (Or rather, why do customers expect them?)

Electronic Payment Terminals bring with them a host of benefits for both shop-owners and their clientele. The payments are secure and they are blessed with features that simplify the payment process regardless of whether the card was issued in France, Europe or the other side of the world. 

They now even accept payment via smartphone, although payment cards, whether physical or virtual, are still far from obsolete.

1.2. Choosing between fixed and mobile terminals

If you’re looking to equip yourself with a payment terminal, you’ll need to decide between: 

  • A fixed terminal: these are connected to the internet or a phone line via a cable. As they can’t be carried around too far, these are generally used by shops with a payment counter. 
  • A mobile terminal: this solution is well adapted for places like cafés and restaurants, where payment may be made at tables and the terminal needs to be moved around. It’s also a good idea for small businesses seeking a machine that’s easy to install and simple to use. These mobile terminals work thanks to a 3G, 4G or GPRS connection. 

1.3. Buy or rent a card reader?

If a business only needs a payment terminal occasionally, buying a machine can often be better value in the long term.

But renting a terminal can also have its advantages: for a start it’s less of an initial financial investment for young businesses still finding their feet, while it’s also easier to adapt to the constant evolution of technology (contactless and mobile phone payments being the recent examples at time of writing). If the terminal you’re renting is unable to keep up with the latest tech, you can just swap it for a new model. This option remains flexible and you can keep up to date with modern payment methods. 

1.4. What level of technology will you need?

Before you choose your terminal, it’s a wise idea to estimate the number of transactions you expect it to make, the average amounts that will be spent on it, the type of clientele and how frequently they make payments. That will give you some idea of the kind of equipment you’ll need for your specific business needs.

When it comes to processing that invisible money, there are, broadly speaking two categories of payment terminal: 

  • Traditional payment terminals of the kind offered by high street banks. These include fixed terminals and those connected by ADSL or Wifi. The mobile versions generally use a GSM network (GPRS or 3G) 
  • MPOS (Mobile Point of Sale) terminals that are supplied by fintechs, companies that combine financial services and the latest technological innovations. These card readers work through a connection with your mobile phone or tablet. MPOS machines also include terminals with more autonomy, so you can connect them either to your smartphone or any other cashier terminal. 

If both traditional and MPOS solutions are available in mobile form, then what’s the difference? 

The bad news for traditional banks is that MPOS terminals come with advantages in terms of cost and technology: an MPOS is generally far less expensive than a standard card reader. Also, MPOS providers don’t offer paying packages or rental and the commission taken for each transaction are fixed. As for the equipment itself, you can connect to an MPOS terminal with a smartphone and then manage all payments from there.  

The above benefits make MPOS terminals popular among shopkeepers seeking to minimize their initial investment but also those business owners who have a good idea of their future volume of sales. 

🔎 We’ll now take a closer inspection of MPOS terminals and break down their cost to buy, the transaction fees and the reasons that currently make them so sought-after by businesses.

2. Mobile terminals that fit the needs of small shop owners and solopreneurs.

2.1. Cost of the payment terminal + cost of each transaction

Let’s take the example of a taxi driver, Marie, who makes €3,000 in fares in a month.

Here is what it would cost Marie to receive all those payments through a MPOS payment terminal: 

Cost to buy an MPOS terminal => between €20 and €30 excluding VAT.

Fixed commission => €0.

Commission per transaction (1.75%) => €52.50.

The difference between MPOS terminals and traditional ones can be calculated with the purchase cost of the machine, the commission on transactions and rental fees. The commission on each payment is usually lower when going through a traditional bank (around 0.45%) but there is also the fixed commission to consider. The rental costs also need to be taken into account and can be anywhere between €20 and €40 per month. 

💡 It’s for the reasons mentioned above that small business owners who don’t generally go over a certain sales ceiling are more attracted to MPOS terminals. The no-subscription formula and the low initial cost of the terminal work out better for their business needs. What’s more, MPOS providers offer commissions that decrease once a certain monthly sales volume has been reached. This is the appeal for new company founders, seasonal businesses, auto-entrepreneurs and small, independent shops. Partnerships can carry these costs even lower, such as the Qonto-Zettle partnership which results in savings through reduced machine purchase costs and commission fees. 

2.2. How do MPOS terminals have the edge when it comes to technology?

MPOS terminals are offered by fintech companies that rely on the advanced technological aspects of their products. Here are some of their plus points: 

  • Payment cards: traditional cards like Visa and Mastercard are accepted regardless of the country they’re issued in. More specific cards such as American Express or the Chinese Union Pay are also compatible. 
  • Mobile phone payments: these are made possible thanks to Apple Pay and Google Pay technologies. 
  • Connectivity: all payments can be managed from the business owner's phone or tablet.  
  • Equipment: shopkeepers and their customers appreciate MPOS machines for their sleek and compact design and their features. Some models can come with printers and can even be used with cash register software.

3. Where can you get a mobile terminal?

You can order MPOS terminals online, directly from the supplier, and you’ll receive it soon after by post. 

To connect and receive your first payments, you need to download the supplier’s app on your smartphone or tablet and the terminal starts working right away. Payments follow the following three steps: 

  • You input the transaction amount on the app. 
  • The customer inserts his or her card and enters the PIN or even just places the card over the machine for contactless payments. 
  • The receipt is sent by email or SMS, unless you opt for an MPOS with printer in order to provide paper receipts. 

Contactless payments (either by card or phone) are growing in popularity among consumers, especially since the start of the Covid pandemic. This, in turn, increases their appeal among vendors. 

If you’d like to get an even clearer idea of MPOS payment terminals and take advantage of money-saving offers, take a look at Qonto’s partnership with Zettle. You’ll find plenty of useful information (in French) here about what mobile payment terminals can do for you, your business and your customers.

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