How to start accepting card payments in your shop

Taking cards is the single largest ongoing cost in most small shops after rent, stock and wages, and it is the one owners understand least well. Not through carelessness. The industry prices it in a way that is genuinely difficult to compare, and that is not an accident.

So this is about the money rather than the technology. Getting a reader is easy. Knowing what you are paying is the hard part.

The three things you are actually buying

Card acceptance gets sold as one product and it is three, which is the root of most of the confusion.

The reader. The physical thing on your counter. Buy it outright for somewhere between a small one-off cost and a few hundred, or rent it monthly. Rental almost always costs more over three years, and it is worth doing that sum rather than accepting the monthly figure because it feels smaller.

The processing. The percentage of every sale. This is the big number and the rest of the article is mostly about it.

The account the money lands in. Usually bundled, occasionally separate, occasionally with its own monthly fee. Ask when the money arrives, because next-day and three-working-days are very different things for a shop’s cash flow.

Why the quoted rate is not the rate

You will be quoted something like 1.4 percent. Then your statement says you paid 2.6 percent, and both numbers are true.

Card transactions are not one thing. A regular’s debit card tapped in the shop is the cheapest transaction in the world. A foreign-issued corporate credit card is one of the most expensive, sometimes three or four times the price. A quoted headline rate is normally the cheapest category, and your actual bill is the mix of what your customers happen to carry.

Three pricing models, and knowing which you are on matters more than the number attached to it.

Blended. One rate for everything. Simple, easy to forecast, and you are paying a margin for that simplicity. Best for small volumes where predictability is worth more than optimisation.

Interchange plus. You pay the underlying card scheme cost, whatever it happens to be, plus a fixed markup. Harder to read on a statement, more honest, and usually cheaper once you have any real volume. Worth asking for by name once you are past a few thousand a month, because it will often not be offered.

Tiered. Transactions are sorted into qualified, mid-qualified and non-qualified buckets, with the provider deciding which is which. Avoid this if you can. The headline rate applies to the cheapest tier and the tiering rules are not in your favour.

The only comparison that means anything is your effective rate. Total card fees for a month, divided by total card turnover for that month. One number, from your own statement, comparable across providers. Work it out for the last three months before you talk to anyone, and open the conversation with it. It changes the discussion immediately, because it demonstrates you know what you currently pay, which most people ringing up do not.

The fees that are not the rate

The percentage gets the attention. These are where a cheap-looking deal gets expensive.

Per transaction fees. A fixed amount on top of the percentage, and this is the one that quietly destroys shops with small baskets. A flat fee that is small in absolute terms is enormous on a two-unit sale: it can be five or ten percent of the transaction on its own. If your average basket is small, weight this far more heavily than the percentage. If your average basket is large, it barely matters.

Monthly minimums. You pay a floor whether you process anything or not. Brutal for a seasonal shop that is quiet for four months a year.

PCI compliance fees, sometimes with a non-compliance charge if you have not filled in a form you were never clearly told about. Ask what it is, whether it applies, and what happens if you ignore the email.

Statement, gateway, authorisation and terminal fees. Each individually small.

Chargeback fees, per dispute, sometimes win or lose.

Early termination. Card contracts run longer than people expect and leaving is expensive. Ask for the term and the exit cost in writing before signing, because this is the fee that keeps a shop on a bad rate for two more years.

The surcharge question

Whether you can pass the fee to the customer depends entirely on where you are. Some countries allow it, some cap it, some ban it outright, and some allow it for credit and not debit. Check your local rules rather than copying what a shop down the road does.

Where it is allowed, a minimum spend for card is usually the better tool than a percentage surcharge. It solves the actual problem, which is the flat per-transaction fee on tiny baskets, and it annoys people less than being charged extra at the moment of paying. Where it is not allowed, price it into your margin and stop thinking about it.

Does it integrate with your POS?

Two arrangements, and the difference matters more than vendors admit.

Integrated. The till sends the amount to the reader. The cashier does not retype it, and the sale cannot be recorded for a different amount than was charged. Fewer errors, faster queue, and card totals that reconcile at the end of the day without effort.

Separate. The cashier reads the total off the till and types it into the reader. Works perfectly well, and it is what a great many small shops do. The cost is a typing error every so often, and a reconciliation at close that occasionally does not match.

Integrated is genuinely better. But it usually means using the processor your POS partners with, at the rate that partnership dictates, and that rate is frequently worse than one you could negotiate yourself. So the real question is: is the convenience worth the spread? Do the arithmetic on your own volume. Half a percent on 15,000 a month is 900 a year, which is a lot to pay for not retyping a number. On 2,000 a month it is 120 a year, and the convenience probably wins.

This is also why a POS that does not tie you to a processor is worth something. It keeps the two decisions independent, so you can change your rate without changing your software and vice versa. There is more on how this dominates the total cost in what a POS system actually costs.

Reconcile it daily, or none of this matters

Whatever you sign, the habit that protects you is the same and it takes two minutes.

At close, compare the card total your POS recorded against the card total the terminal reports. Separately from counting the cash. Write down the difference, including when it is zero.

A mismatch usually means a sale was rung up as cash and paid by card, or a refund went through one and not the other. Caught the same day, it takes a minute to explain. Found a month later in a statement, it is unrecoverable, and it is one of the more common reasons a till never balances.

The short list to ask any provider

In writing, in one email.

1. My effective rate on my actual volume and card mix, not a headline rate.
2. Which pricing model: blended, interchange plus, or tiered.
3. Every fixed fee: per transaction, monthly, minimum, PCI, gateway, statement.
4. Contract length and the total cost of leaving early.
5. Reader: buy or rent, and the three year cost of each.
6. When the money reaches my account.
7. Whether it integrates with my POS, and whether integrating changes my rate.

Get two or three of these back and compare only on line one. It is the only line that is comparable.

Where StoreWave sits

StoreWave does not process card payments and does not take a cut of any transaction. Cash, card and store credit are recorded as tenders on the sale, and your own terminal from your own provider moves the money.

That is a deliberate choice and it has a real consequence for the bill above. Your rate is a negotiation between you and a processor you chose, we cannot mark it up, and switching processors does not mean switching POS. Given that processing is usually eight to twelve times what the software costs, tying those two decisions together seemed like the wrong thing to do to a shop.

The trade is honest: because there is no processor partnership, there is no integrated reader either. Your cashier reads the total off the screen and enters it on the terminal. That is the separate arrangement described above, with the typing error it implies, and if a fully integrated queue is what you need then a bundled system will serve you better.

What StoreWave does do is make the daily reconciliation easy. Every payment records its tender, so the card total and the cash total are separate figures on the day’s report, ready to check against the terminal in the two minutes described above. Reports export to a file on the free plan as well as the paid one.