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In this article, you’ll learn:

  • What a card reader is

  • How credit card readers work

  • The different types of card readers

  • What types of payments you can accept

  • How to find and use a card reader in your business


More businesses are investing in card readers to reflect their customers’ desire to pay using a debit or credit card. Card payment activity is increasing rapidly in Ireland, and more than half of that spending comes from retail and groceries. It accounted for 64% of all payment activity in 2020 (Source: centralbank.ie). 

More people want to use their cards when they go to the store, a whim businesses are realising should be accommodated. That’s where the card reader comes in. 

What exactly is a card reader? 

A credit card reader is a machine that decodes the information in a credit or debit card. This information is typically stored in a microchip, although cards with a magnetic stripe are still around.

Card readers process a card’s account number, cardholder information, and security code almost instantaneously. 

These devices are also called point of sale (POS) terminals. The first POS terminal was introduced by Visa in 1979, the same year that Mastercard started putting a magnetic stripe on the back of their cards so that terminals could decode their information. 

These card terminals were connected to the bank via a physical wire, meaning they were bound to one location. In 1997, Norwegian Telenor Mobile rolled out a portable card reader that was wireless, and worked in various locations thanks to Ethernet or Bluetooth connectivity. 

Since then, card readers have only become smaller, lighter, faster, and more versatile. 

How do card readers work? 

Although transactions processed by card readers happen in seconds, a lot happens in those seconds. Several parties are involved in making transactions successful. 

First, the customer presents their card so the device can read it, either by swiping, inserting, or tapping it. Then the payment needs to be verified by the card reader provider or the merchant’s bank. 

Once the payment is verified, the customer’s card issuer checks to see that all the cardholder details are correct and that the customer has enough money in their account to complete the transaction. If there are sufficient funds, the transaction is authorised. 

The bank then signals the card reader that the transaction has been authorised, confirming the payment. Finally, the amount paid is withdrawn from the customer’s account and sent to the merchant’s account. It generally takes 2 or 3 days for the money to appear. 

What are the different types of card reader? 

Credit card readers come in different forms, and though the process of accepting a payment follows the 5 steps outlined above, they function slightly differently. These are the most common types of card reader: 

  • Countertop card readers. These are stationary devices that businesses usually place on the checkout counter. Because they stay in one place, the customer needs to approach the merchant in order to pay. 

  • Portable card readers. Not bound to a physical location, these can be freely moved around within a business’s premises. They work in different locations because they access the internet via a bluetooth or Wi-Fi connection, and are more convenient because customers don’t have to line up at the counter to pay. 

  • Mobile card readers are wireless and can be taken anywhere thanks to Wi-Fi, bluetooth, and sometimes SIM card connectivity options. Importantly, they are explicitly designed to be taken and used on the go, unlike portable card readers. That means they’re generally much smaller. 

The main difference between these readers is how mobile they allow you to be. But some card readers also include features beyond payment processing. 

What kinds of payments can card readers accept? 

There are a few different ways someone could pay with their card, depending on what kind of card they have. For example, cards with a magnetic stripe on the back can be swiped through a card reader, although magnetic stripes are rare nowadays because they’re more subject to fraud. 

The common types of payments for card readers to accept are: 

  • Chip and PIN payments. A chip and PIN payment is possible if the customer’s card has a chip embedded at one end. They just insert the side with the chip into the reader and type in their 4-digit PIN. If their details are correct, the transaction is accepted. 

  • Contactless payments. You’ll know a card reader can accept contactless payments when you see a symbol that looks like the Wi-Fi symbol, but sideways, usually near the top of the device. To make a contactless payment, the customer just taps their card on the symbol and holds it for a second or two. 

  • Mobile wallet payments. Mobile wallets are a form of contactless payment, only customers use their smartphones in place of a card. By entering the details of their credit or debit card into an app like Apple Pay or Google Pay, they can tap their phones on the reader like they would a contactless card. Mobile wallet payments are authenticated with either a fingerprint or facial scan. 

Just about every card reader on the market will accept chip and PIN payments, and many accept contactless as well. Especially now, because Visa and Mastercard – two of the most common providers – required all new card machines to accept contactless payments back in 2019. And as mobile wallets are another form of contactless, any reader accepting contactless payment will accept payment via mobile. 

How do I choose a card reader for my small business?

Modern smart card readers offer you more features than ever before and more flexibility than ever before. With the growing popularity of contactless payment, you’ll want to make sure that your card reader accepts it – chip and PIN is the default card payment method all card readers will support. 

Versatility is key with card readers. A fully mobile card reader will allow you to go anywhere and still get paid. Look for something that’s easily portable and can access the internet no matter where you take it. 

It’s important to look at not only the reader itself, but the provider. Many card reader providers will tack on extra costs that are best to avoid. When considering which card reader to buy, watch out for: 

  • Contracts and recurring fees. Ideally, you won’t have to sign a minimum-term contract to use your card reader. That way you have more control over when and how often you use it. Recurring fees, like a monthly subscription, are also best to avoid. 

  • Transaction costs. You want a provider that charges as low of a transaction fee as possible. You also want that fee to be fixed so that it’s easy to calculate and incorporate into your costs. 

  • Transfer speed. The standard time it takes for the funds from a transaction to appear in your account is 2 or 3 days.

How are SumUp card readers perfect for businesses? 

At SumUp, we know you need a flexible, low-cost, mobile way to get paid. That’s why all our card readers are internet-ready, powerful processing machines that fit right in your hand. 

You’ll never have to turn a customer away, because our smart card readers accept all forms of payment on the market. In addition to credit and debit cards, we accept contactless payment and mobile wallets. 

Enter the payment amount on your card reader or in the SumUp App and tap ‘Charge’. Then, your customer inserts or taps their card and the payment is done. 

So you can run your business on your terms, we don’t drown you in paperwork or charge any recurring fees. There’s no minimum-term contract and no subscription cost, only a 1.69% fee per successful transaction. 

Is your business ready to tackle card payments?

Get the SumUp Card Reader! Increase your payment acceptance by taking debit, credit and contactless payments. Pay only 1.69% per transaction.

No monthly contacts. No hidden fees. Ever.

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About SumUp

When you join SumUp, you can also open a Business Account with us for free. If you have a Business Account, the money you make from sales will always be there the day after the sale, even on weekends and holidays. It’s the quickest way to access any money you earn via SumUp.

Since SumUp’s founding in 2012, we’ve helped over 3 million businesses, across 33 countries, take control of their futures and leave their customers smiling. We’re proud to be accessible to merchants and customers alike as the most user-friendly way to accept payments in Ireland, with the lowest transaction fees around.

When you sign up with us, you get more than a card reader. SumUp merchants can easily take their products online with an Online Store, track and manage customer debts with Invoices, and automate all the boring parts of running a business with SumUp POS


In Summary:

  • A card reader decodes the information on a credit or debit card (and sometimes a smartphone) to process transactions. 

  • Card readers work by communicating with the card electronically and sending signals to both parties’ banks in order to verify and authorise transactions. 

  • The main types of card readers are countertop, portable, and mobile.

  • Modern card readers can generally accept chip and PIN, contactless, and mobile wallet payments. 

  • SumUp card readers are simple for you and your customer to use, have no contracts or recurring fees, and accept any type of payment you’re likely to encounter. 

Find the right payment solution for your small business today.

Get started now

With SumUp, you can quickly and easily accept credit and debit card payments with your smartphone or tablet.

*Price excluding VAT. 30-day-money-back-guarantee from date of delivery. Further conditions apply.