The cheapest way to take card payments in the UK is rarely the one with the lowest headline rate. It comes down to your sales volume, whether you pay a monthly fee, and the sneaky extras nobody mentions. Here is the blunt truth on cheap card payments for small businesses.
The cheapest way to take card payments starts with all-in cost, not the headline rate
When people search for the cheapest way to take card payments, they fixate on the transaction percentage. That is only half the story. The real cost is buy-once hardware plus the percentage you pay on every sale, plus any monthly fee, plus the fees hiding in the small print.
A pay-as-you-go card reader is the classic cheap setup: you buy the reader once, then pay a flat percentage per sale with no monthly fee. That is why it suits low or seasonal volume so well. You only pay when you actually sell something.
To work out your genuine cost, add the hardware, multiply your expected monthly card takings by the percentage rate, then add any monthly fee. That total, not the headline rate, tells you what is really cheapest for your business. Our fee calculator does the maths for you in seconds.
- Hardware: a one-off cost, often £19 plus VAT for a basic reader.
- Transaction fee: a percentage taken from every card sale.
- Monthly fee: zero on pay-as-you-go plans, which is the point.
- Hidden extras: refunds, payouts, currency conversion and PCI charges.
The cheapest card readers in the UK, ranked
For most small businesses and sole traders, the cheapest card reader is a no-monthly-fee, pay-as-you-go device. Here is how the main players stack up. Rates change, so check current terms before you buy.
SumUp is usually the cheapest entry point. The reader starts from £19 plus VAT with no monthly fee. Standard pay-as-you-go is 1.69% per transaction, and its Payments Plus plan drops to 0.99% if you have steadier volume and are happy with a small monthly cost.
Square is the close rival, with a reader from £19, no monthly fee, and 1.75% per in-person card sale. It bundles in decent free software, which matters if you want basic stock and sales reporting thrown in.
Zettle by PayPal sits at 1.75% per transaction, again with no monthly fee. It is a sensible pick if you already live in the PayPal ecosystem, though the rate is not the lowest on the list.
- SumUp: reader from £19 plus VAT, 1.69% standard or from 0.99% on Payments Plus, no monthly fee.
- Square: reader from £19, 1.75% per sale, no monthly fee, free software included.
- Zettle by PayPal: 1.75% per sale, no monthly fee, handy if you use PayPal already.
When a monthly-fee plan actually beats pay-as-you-go
Pay-as-you-go wins on cost right up until it does not. Once you take enough card payments, a lower percentage on a monthly plan can save you real money, even after paying the monthly fee.
The logic is simple. A monthly plan trades a fixed cost for a cheaper per-sale rate. If your card takings are high enough, the saving on every transaction more than covers the fee. If they are low or lumpy, the fixed cost just eats your margin for no reason.
As a rough rule, if you are turning over a few thousand pounds a month on cards, every month, it is worth pricing up a lower-rate plan. If your takings swing wildly or you only trade part of the year, stick with no monthly fee. Run both scenarios through the fee calculator before deciding, because the crossover point depends entirely on your numbers.
- Steady, high monthly card volume: a lower-rate monthly plan usually wins.
- Low, new or seasonal volume: pay-as-you-go with no monthly fee wins.
- Unsure: model both against your real takings, do not guess.
Tap to Pay on a phone: the near-free way to start
If you want the absolute cheapest start, you might not need to buy anything. Tap to Pay lets you accept contactless cards and mobile wallets straight on your phone, using the same pay-as-you-go apps from SumUp, Square and Zettle.
There is no reader to buy, so your only cost is the transaction percentage, which is typically the same as the physical reader rate. For a market trader testing an idea, a mobile business, or anyone who takes the odd card payment, it is hard to beat on upfront cost.
The catch is your phone. Tap to Pay needs a fairly recent handset with the right hardware, and it only takes contactless, so no chip and PIN. For low-value, occasional sales that is fine. For busy trading you will still want a proper reader.
- No hardware to buy: you use the phone you already own.
- Same pay-as-you-go rate as the physical reader in most cases.
- Contactless only, and needs a compatible, recent smartphone.
The hidden costs that catch people out
A low percentage means nothing if the provider claws it back elsewhere. This is where a headline-cheap deal quietly turns expensive, and it is exactly what to check before you commit.
Watch how and when you get paid. Some providers pay out the next working day for free, others charge for instant payouts or hold your money longer. Refunds can cost you the original transaction fee, and taking payments in foreign currencies often adds a conversion charge on top.
Then there are the contract nasties: monthly minimums, PCI compliance fees, statement charges and early exit penalties on longer tie-ins. Pay-as-you-go readers largely dodge these, which is another reason they are cheap. Read our full guide to hidden card machine fees so none of them surprise you.
- Payout delays or fees for getting your money faster.
- Refund fees, where you lose the original transaction charge.
- Currency conversion charges on non-sterling payments.
- Monthly minimums, PCI fees and early-exit penalties on contracts.
So what is genuinely the cheapest?
For most new businesses, sole traders and market traders, the cheapest way to take card payments is a pay-as-you-go reader with no monthly fee, or Tap to Pay on your phone if you take card payments only now and then.
SumUp tends to be the cheapest on the headline rate for casual use, Square throws in the best free software, and Zettle earns its place if you already use PayPal. None lock you into a monthly fee, so your risk is low.
Once your card takings are consistently high, revisit the sums, because a lower-rate monthly plan may then beat pay-as-you-go. Compare current deals on our list of card readers with no monthly fee, and run your own numbers through the fee calculator before you sign up to anything.
- Low or seasonal volume: pay-as-you-go reader or Tap to Pay wins.
- High, steady volume: price up a lower-rate monthly plan.
- Always compare all-in cost, never the headline rate alone.
FAQs
What is the cheapest way to take card payments in the UK?
For most small businesses it is a pay-as-you-go card reader with no monthly fee, such as SumUp from 1.69%, or Tap to Pay on your phone if you only take the odd card payment. The cheapest option always depends on your sales volume, so compare the all-in cost, not just the headline rate.
What is the cheapest card reader for a small business?
SumUp and Square both sell a reader from around £19 with no monthly fee. SumUp usually has the lower headline rate for casual use, while Square includes better free software. For low or seasonal volume, either is a cheap, low-risk choice. Check current terms before buying.
Is it cheaper to take card payments with no monthly fee?
Usually, yes, if your card takings are low, new or seasonal. No monthly fee means you only pay when you sell. But once your volume is consistently high, a lower-rate monthly plan can work out cheaper overall, even after the fee. Run both through a fee calculator to see your crossover point.
Can I take card payments without buying a card machine?
Yes. Tap to Pay lets you accept contactless cards and mobile wallets straight on a compatible smartphone using apps from SumUp, Square or Zettle, with no hardware to buy. You pay only the per-transaction rate. It is contactless only, so for chip and PIN or busy trading you will still want a physical reader.
