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How does a credit card machine work?

31 January 2018 Product Information

There’s a good chance you’ve used one in taxis, coffee shops, supermarkets, pubs, restaurants or beauty salons – card machines are everywhere these days. The total number of card machines in the UK is now estimated to be around 2.2 million and the number is growing. But how do card machines actually work?

In this short guide we’ll cover the nitty gritty of card machine technology and the role they play in processing payments.

What is a credit card machine?

First, let’s cover the basics. Card machines, otherwise known as PDQChip and PIN or card readers, are handheld devices that allows businesses to accept card payments electronically. There are three main types of card machines – countertopportable and mobile. Such is the growing popularity of card payments in the UK, the majority of consumers now expect a choice to pay by card wherever they go. When it comes to processing payments, the role of a card machines is integral. Put simply, when it comes to face-to face payments, card machines make taking payments quicker, simpler and more secure.

How do credit card machines work?

Once the customer selects a product or service to buy, it’s time for the customer to pay. The merchant will type in the total amount to be paid on the card machine and handle it to the customer. The customer will then confirm the total amount, insert their card, enter their PIN on the card machine and press Enter. For contactless transactions, the customer will only need to confirm the amount on the screen and simply tap their card on the contactless card reader. This will then spark a whole sequence of events that take place in a matter of seconds. Here is the full process:


Step 1 – payment authenticated

A merchant bank receives the request from the card machine via a telephone or broadband line. One of the main tasks of a merchant bank is to create and maintain a merchant account that allows the business to take card payments.


Step 2 – transaction submitted

Once the request is received, the merchant bank asks the debit or credit card provider (such as VISA or MasterCard) to seek authorisation from the customer’s bank.


Step 3 – authorisation requested

The card provider will verify that the card details are correct, they’ll pass the authorisation request onto the customer’s issuing bank.


Step 4 – authorisation response

An issuing bank supplies the customer with their credit or debit card. The bank will check the customer details and ensure they have enough cleared funds in their account to make payment.


Step 5 – retailer payment

Once the payment is verified, a signal is sent back to the card machine. A receipt is printed with proof of the accepted payment. While authorisation happens in seconds, it normally takes 2-3 days for the customer’s bank to send the payment to your acquiring bank.  


A-Z of card machine features and functionality

Now that we understand the role of card machines and how they work, let’s drill down into the device. Whether it’s an Ingenico or Spire, whatever the brand, you’ll find that most card machines include several common features.


Android Pay

Android Pay is a mobile payment system that lets customers pay for goods using an Android device like a mobile phone or tablet. By adding their card details to their Android device, customers can use it to pay in-store for fast and secure payment. Payment is made using RFID (Radio-frequency Identification) or NFC (Near Field Communication) by holding the mobile device to the card machine. All of our card machines come with Android Pay as standard without any additional fees. 


Apple Pay

Now for the Apple equivalent. Apple Pay is a contact-free payment system where customers can pay for goods and services using an Apple device. By adding their card details to their Apple Wallet, customers can use the device to pay in-store and online. All of our card machines come with Apple Pay as standard without any additional fees. 


Built-in longlife battery

It’s worth noting that some card machines are powered by a longlife battery (portable or mobile devices). These devices will need a charging base, which should be set up in a convenient location close to a power source.


Chip and PIN

As you’ve probably noticed, there’s a chip embedded into your debit or credit card – this is crucial to Chip and PIN (Personal Identification Number). This technology uses sophisticated processing to identify genuine cards and make counterfeiting more difficult. The 4-digit PIN you enter in the keypad is used to verify your identity.



Contactless is a fast, simple and a secure way to accept payment. There’s no need to enter a PIN, a customer simply touches their Contactless card to a card machine. Just like Android Pay and Apple Pay, Payment data is received from the card chip through a Radio-frequency Identification (RFID) and Near Field Communication (NFC). All of our card machines come with Contactless as standard so you don’t have to pay any additional fees. 


Integrated payments

Using a secure cloud-based solution, a secure link is created between your card machine and EPoS (Electronic Point of Sale) system. This link syncs both devices to help reduce miskeyed transactions and speed up transactions. Learn more about integrated payments

Keypad entry

At the beginning of a transaction, the cashier will either manually enter the owed total amount into the card machine or into the EPoS system which will automatically send it through to the card machine. While keypad entry doesn’t apply to online payments, you will need to enter the total amount and card details when it comes to phone payments. We have created a short guide on how to take card payments over the phone


Mobile network

This features applies solely to mobile card readers. Using a SIM card that comes pre-installed, the card machine connects wirelessly with a mobile network just like a phone – this allows you to take payment anywhere in the UK.


Merchant Account

If you have multiple storefronts, you can use the same merchant account and receive a single monthly statement for your card payments. If you have different businesses with different owners, we can set you up with separate accounts and help you keep track of your transactions.



You’ll need to complete a reconciliation at the end of each working day – this will ensure the correct amount lands in your accounts. Again, this function can differ from device to device. Simply press MENU, select TOTALS and then choose END-OF-DAY BANKING. You’ll need to enter your supervisor ID. Press ENTER and the terminal will connect and print your reconciliation report.  



Sometimes these things happen. Depending on your card machines, press MENU and choose REFUND. Key in the amount of refund transaction and press ENTER. You may be asked to enter your supervisor ID into the card machine. The customer won’t need to enter their PIN and the transaction should proceed as normal.


Tips and gratuities

Once the customer confirms the total amount on the terminal, they may be asked on screen if they’d like to leave a tip. If the customers presses the CLEAR button (No), the transaction will proceed as normal with no gratuity added. If the customer presses ENTER (YES), they can specify and confirm a gratuity amount.


What is the difference between a debit & credit card machine?

There is no difference between the two. All card machines will accept both debit and credit cards. Bear mind that each card type (whether it be Visa or MasterCard) can have different fee structures. If you want to know the exact costs fill in our online form to get a personalised quote based on your business needs. 

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