Accepting Card Payments: A Guide for UK SMEs

Card payments are no longer a “nice to have” for small businesses – they’re expected.

Customers increasingly prefer to pay by debit card, credit card, or mobile wallet. Whether you're running a café, offering services, or selling online, the ability to accept card payments can directly impact your sales.

The good news is that taking card payments is easier and more affordable than ever. You no longer need long contracts, expensive terminals, or complicated bank agreements.

This guide explains how to accept card payments as a small business, the different options available, how much it costs, and how to choose the right setup for your needs.

How to accept card payments as a small business

To start taking card payments, you typically need three things:

A merchant account (where your funds are temporarily held)
A payment processor (the company that handles transactions)
Hardware or software to take the payment (such as a card reader, POS system (point-of-sale system), online gateway (a way to take payments on your website), or a payment app on your smartphone.)

Many modern providers bundle all three together. This means you can sign up online and start taking payments within a few days – sometimes even the same day.

Once you’re set up, payments usually follow this process:

Customer taps, inserts, or enters their card details
Payment is authorised by their bank
Funds are processed by your provider
Money is transferred to your business bank account (typically within 1–3 days)

You can accept card payments in three main ways: in person, online, or remotely (phone/invoice). The best option depends on how your business operates.

Choosing the right card payment services

Different types of card payment services suit different businesses – here’s how they compare.

Mobile card readers (best for micro-SMEs)

Mobile card readers connect to your phone or tablet and allow you to accept payments anywhere. They’re popular with:

Tradespeople
Market stall sellers
Freelancers
Mobile businesses
Pop-up shops

Benefits include:

Low upfront cost
No long-term contracts
Portable and easy to use
Quick setup

This is often the simplest way to start accepting credit card payments for small businesses.

Integrated POS systems (best for retail and hospitality)

Point-of-sale (POS) systems combine card payments with:

Inventory management
Sales tracking
Receipts
Staff management
Reporting

They’re ideal for:

Shops
Restaurants
Salons
Hospitality venues

While more expensive upfront, POS systems provide deeper business insights and streamline operations.

Online payment gateways (best for e-commerce)

If you sell online, you’ll need a payment gateway that integrates with your website.

This allows customers to:

Pay by card
Use digital wallets
Complete secure checkout

Online gateways work with:

E-commerce stores
Booking systems
Subscription services
Invoice payments

Many businesses combine online and in-person payments for flexibility.

Tap to Pay apps (best for nano businesses and sole traders)

Using a free app from providers like SumUp or Square, you can turn your smartphone into a card reader – without any extra hardware. Customers simply tap their card or device against your phone to pay.

This suits:

Sole traders
Casual sellers
Market traders who want a hardware-free backup
Anyone just starting out

Benefits include:

No upfront cost
Nothing to carry or charge separately
Quick to set up
Works anywhere you have signal

It's worth noting that some mobile card reader providers (like SumUp) include Tap to Pay as a feature within their existing app, so you may already have access to it if you're signed up with them.

The benefits of accepting credit card payments

If you’re still cash-only, accepting card payments can offer several advantages.

Higher average transaction values

Customers are twice as likely to spend more when paying by card than cash.

Faster checkout

Contactless payments speed up queues and improve customer experience.

Improved professionalism

Card acceptance can make your business look more established.

Better cash flow visibility

Digital payments automatically record transactions, making accounting easier.

Increased sales opportunities

You won’t lose customers who don’t carry cash.

For many small businesses, accepting card payments quickly pays for itself.

Understanding costs: Card payment fees in the UK

Card payment fees vary depending on provider and setup. The main costs can include:

Transaction fee – A percentage per payment (typically 1%–2.5%).
Hardware cost – One-off purchase or monthly rental.
Monthly account fees – Some providers charge subscriptions.
Payment gateway fees – For online transactions.
PCI compliance fees – Security compliance requirements.
Chargeback fees – If a customer disputes a payment.

The two main pricing models are:

Flat-rate pricing: A single percentage for all transactions.
Interchange-plus pricing: Separate fees based on card type and risk level. (This is often cheaper for higher volumes.)

Always check:

Settlement time (how fast you receive funds)
Contract length
Minimum monthly fees
Early termination charges

Comparing SME payment solutions

Here’s how some popular UK providers compare for small businesses.

Provider	Hardware cost	Transaction fee	Monthly fee	Best for
SumUp	Low	~1.69%	No	Micro businesses
Square	Low	~1.75%	No	Retail and mobile
Zettle	Low	~1.75%	No	Small retailers
Traditional merchant bank	Higher	Lower (variable)	Often yes	High volume businesses

Mobile-first providers are typically best for small businesses starting out. Traditional merchant accounts may offer lower fees but often involve contracts and higher setup costs.

5 steps to taking your first card payment

Ready to start? Here’s how to set up card payments quickly.

Step 1: Choose a provider

Compare pricing, features, and hardware options to pick one suited to your business type.

Step 2: Create your account

Business details
Bank account information
Identity verification

Step 3: Order or set up hardware

If taking payments in person, you’ll receive a card reader or POS device.

For online payments, connect your payment gateway to your website.

Step 4: Test your setup

Run a small test payment to confirm everything is working correctly.

Step 5: Start taking payments

You’re ready to accept debit cards, credit cards, and contactless payments.

Most small businesses can complete this process in under a week.

Funding your new payment system

While mobile card readers are affordable, more advanced POS systems or multi-location setups can require upfront investment. That’s where funding can help.

You could consider:

Equipment finance for POS hardware
Working capital loans for system upgrades
Merchant cash advances based on card sales

If you’re planning to upgrade your payment infrastructure, spreading the cost can protect cash flow while you grow.

Choosing the best card payments for your business

When deciding which card payment solution to use, consider:

Where you sell (in-store, mobile, online)
Average transaction size
Monthly sales volume
Budget for hardware
Integration with accounting software
Settlement speed

The right solution should make payments easy for both you and your customers.

Final thoughts

Taking card payments is now essential for most UK small businesses. Whether you choose a mobile reader, POS system, or online gateway, the right setup can improve customer experience and unlock more sales.

Modern providers have made it easier than ever to accept card payments without long contracts or large upfront costs.

Start simple, choose a solution that fits your business, and upgrade as you grow.

Need to upgrade your POS or invest in new equipment?

Apply for a small business loan in minutes and see what funding options are available.