Payment Options Explained: Card Readers, Contactless & More for UK Small Businesses
Choosing how to take payments is one of the most important decisions you’ll make as a small business owner. It affects everything — from how professional you appear to how quickly you get paid. But between card readers, contactless payments, mobile wallets, and more, it can all feel a bit overwhelming.
In this guide, we’ll explain the most common payment options available to small UK businesses in 2025, how they work, and which ones might suit your business best.
Below, we break down five of the most common mistakes small business owners make when selecting a card reader — and how to avoid them.
1. Card Readers (Chip & PIN + Contactless)
Card readers are now the go-to solution for face-to-face transactions across almost every type of small business in the UK — from market traders and mobile barbers to cafés and retail shops. These devices let you accept both chip & PIN and contactless payments, making them incredibly versatile and customer-friendly.
There are two main types of card readers:
a) Bluetooth-Connected Readers
These pair with your smartphone or tablet via Bluetooth and rely on a companion app to process transactions. Your device acts as the brain, handling payments, issuing receipts, and tracking sales data.
How they work:
You install the app (Zettle, Square, etc.) on your phone or tablet.
Pair the card reader via Bluetooth.
Enter transaction amounts in the app.
Customer taps or inserts their card into the reader.
Payment processes within seconds, and a digital receipt is issued.
This setup is ideal for businesses on the move — tradespeople, hairdressers, event sellers — because it’s light, flexible, and requires very little gear beyond your phone.
Benefits:
Typically the lowest upfront cost (e.g., Square Reader for under £20)
Seamless integration with invoicing, reporting, and inventory
Payments settled to your bank in 1–2 working days
Accept all major cards and mobile wallets (Apple Pay, Google Pay)
b) Standalone Readers
Standalone card readers like the SumUp Solo don’t need to pair with a smartphone. Everything is built in — the screen, software, Wi-Fi or SIM connectivity, and receipt options.
How they work:
You switch on the device and connect it to Wi-Fi or mobile data.
Enter transaction amounts directly on the reader’s touchscreen.
Tap or insert card to take payment.
The reader handles everything — no phone needed.
This option is great if you want a minimal, professional setup with less reliance on your own tech.
Benefits:
No need for an additional device
Easy to train staff or volunteers to use
Great battery life for full-day use
Clean aesthetic and compact design
Other Useful Features Found in Modern Card Readers:
- Digital Receipts: Send receipts via SMS or email.
Tips & Gratuities: Optional tip prompts for hospitality businesses.
Product Libraries: Create buttons for common items or services.
Tax Settings: Automatically add VAT where needed.
Multi-user Accounts: Track sales per team member.
Our Experience:
In testing across pop-ups, mobile appointments, and fixed venues, we found:
SumUp Solo felt the most professional and “polished” with its touchscreen and phone-free simplicity.
Zettle offered the best reporting features and app flexibility for more complex businesses.
Square was the fastest to set up and most intuitive for beginners, with a super clean design.
All readers performed reliably under pressure, with only minor differences in speed and connectivity depending on Wi-Fi or mobile data strength.
Ideal For:
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Retail counters
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Pop-up markets
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Mobile service providers
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Events and festivals
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Home-based businesses
2. Mobile Wallets (Apple Pay, Google Pay, Samsung Pay)
Mobile wallets have rapidly become one of the most popular and convenient payment methods, particularly among smartphone users in the UK. Services like Apple Pay, Google Pay, and Samsung Pay allow customers to store their debit or credit card securely on their phone or smartwatch, creating a fast, contactless way to pay in-store. Unlike traditional cards, these digital wallets rely on biometric authentication (such as Face ID or fingerprint), which adds an extra layer of security and removes the need to enter a PIN. As more consumers expect to pay with their devices — especially younger shoppers and professionals — it’s increasingly important that small businesses offer this option at the point of sale.
How it works:
The customer holds their phone or smartwatch near your contactless card reader.
Authentication is done via Face ID, fingerprint, or passcode.
The card data is tokenised and securely transmitted to your payment terminal.
Benefits:
- Speed: Payments are often faster than chip & PIN.
- Security: Biometrics and tokenisation make it harder to commit fraud.
- No contact needed: Great for hygiene-conscious environments (like cafés or barbers).
- High limits: Unlike standard contactless cards (usually £100), mobile wallets can approve larger payments, depending on the issuing bank.
What You'll Need:
- A card reader that supports NFC/contactless payments (all major brands like SumUp, Zettle, and Square do).
No additional setup for you — if your reader accepts contactless, it already works with mobile wallets.
Ideal For:
- Fast-paced retail or hospitality
- Businesses catering to a tech-savvy audience
- Environments where speed or cleanliness is important
3. Bank Transfers (Faster Payments, BACS)
Bank transfers are one of the oldest and most direct forms of payment — and they’re still widely used by many UK businesses, especially for larger transactions or services. When a customer pays you via bank transfer, they send funds directly from their account into yours, cutting out third-party payment processors. This method is especially common in trades, consultancy, wedding and event industries, and B2B services. While traditional BACS payments can take up to 3 working days, Faster Payments (the standard for most online banking in the UK) often arrive within seconds. There are no transaction fees on your end, which is a major advantage — but it’s less flexible for quick or high-volume sales.
How it works:
You provide your bank details (account number, sort code).
Customer sends payment via online/mobile banking.
You receive the funds directly into your business account.
Benefits:
No transaction fees from payment providers.
Secure and traceable with built-in digital recordkeeping.
Works well for high-value or recurring payments.
Limitations:
Not instant in some cases (especially evenings or weekends).
Slower admin — the customer must manually enter your details.
No automation or receipts unless you issue them manually.
No easy refund method — you’ll have to send a manual bank payment back.
Ideal For:
Freelancers and consultants invoicing clients
Tradespeople taking deposits or stage payments
Wedding suppliers, B2B services, or contractors
4. Payment Links
Payment links are a powerful, flexible tool for businesses that sell remotely, offer mobile services, or need to take one-off payments quickly and securely. Instead of taking a card payment in person, you generate a secure, custom payment link through your POS app (like Square, Zettle, or SumUp) and send it via email, text, or any messaging app. The customer clicks the link, enters their card details, and completes the payment online — no face-to-face contact needed. It’s particularly useful for service-based businesses, or anyone taking orders through Instagram, WhatsApp, or email. It removes the friction of setting up a full eCommerce website while still letting you take card payments digitally.
How it works:
You generate a unique payment link using your card reader’s app (e.g. SumUp, Zettle, or Square).
Send it via email, SMS, or WhatsApp.
The customer clicks the link, enters their card details, and pays via a secure webpage.
Benefits:
No technical setup required — no website, no coding.
Very flexible: Works for one-off invoices, deposits, or chasing up missed payments.
Faster than bank transfer for both you and the customer.
Trackable within your card reader app’s dashboard.
Limitations:
Slightly higher fees than in-person card payments (typically ~2.5%).
Some customers may be cautious with links if they don’t recognise the sender.
Not ideal for high-frequency transactions.
Ideal For:
Mobile businesses (e.g. beauty therapists, trades)
Remote consultations or product sales
Late payments or flexible billing
5. Invoicing with Online Payment Options
For businesses that operate on a quote-to-invoice model, offering professional invoices with integrated payment options can dramatically speed up your cash flow. Platforms like Square, SumUp, and Zettle now let you create branded invoices and send them directly to clients by email. Each invoice includes a secure “Pay Now” button, allowing customers to pay immediately by card, bank transfer, or mobile wallet. This gives your business a more professional feel, reduces admin time, and removes the barrier of waiting for a manual bank transfer. It’s particularly helpful for businesses offering project-based work or ongoing client relationships.
How it works:
Create an invoice in your provider’s dashboard or app.
Add your customer’s email and a description of services or goods.
Include due date, tax info, and payment terms.
Customer receives it, clicks to pay by card or mobile wallet.
Benefits:
Looks professional and helps you build trust.
Simplifies bookkeeping with automatic records.
Quicker payment cycles — customers can pay instantly.
Optional features like part-payments, deposits, and recurring billing.
Limitations:
Still reliant on your customer checking their email and acting on it.
Usually incurs a higher processing fee (~2.5%).
Less useful for in-person or spontaneous purchases.
Best For:
Freelancers and consultants
Services with clear deliverables
Businesses offering payment terms or contracts
6. Buy Now, Pay Later (BNPL) for Services
Once seen mainly in online retail, Buy Now, Pay Later (BNPL) services like Klarna, Clearpay, and PayPal Pay in 3 are increasingly being adopted by service-based businesses. These services allow your clients to spread the cost of a product or service over several interest-free instalments, making higher-ticket items or packages more affordable. While adoption is slower in in-person setups, many POS systems (especially Square and some booking tools) are starting to integrate BNPL options. For the customer, it’s a smoother alternative to credit cards — and for the business, you get paid upfront while the BNPL provider handles repayment and risk.
How it works:
You offer a BNPL option at checkout (in-person or online).
The BNPL provider pays you in full upfront.
Your customer repays the provider over 3–12 months (often interest-free).
Benefits:
Increased conversions — customers are more likely to book.
Upfront payment for you — no risk of chasing.
Attracts higher-spending customers.
Considerations:
Fees are usually higher (3–6%) and deducted from your payout.
Not all providers support in-person businesses (yet).
May not be suitable for businesses targeting older or cash-based demographics.
Best For:
Beauty salons offering big-ticket treatments
Wedding suppliers and event planners
Coaching, training, or personal services with fixed packages
Which Payment Options Should You Offer?
Here’s how to decide:
| Your Business Type | Best Payment Options |
|---|---|
| Market stall or pop-up | Card reader + contactless + (optional) cash |
| Mobile services | Zettle or Square + online payment links |
| Café or fixed location | SumUp Solo or Square Terminal |
| Freelancers/tradespeople | Bank transfer + invoices + card reader as backup |
| eCommerce with retail | Card reader + BNPL + online invoicing |
Final Thoughts
The right payment setup makes your business look more professional, speeds up cash flow, and improves the customer experience.
At UK Card Readers, we’ve tested all the main devices and payment methods in real business settings — and we’ve seen firsthand how much smoother things run when your tech matches your workflow.
Whether you’re just starting out or looking to upgrade, there’s a perfect combination for you.
Start by comparing the top UK card readers
Or check out our full SumUp Solo Review, Zettle Review, or Square Reader Review for deeper insights.