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Merchant services: PDQ machines for small businesses: why and how to get them?

Reading time: 9 mins

Many small business owners don’t know how PDQ machines really work, or how to get them.

It’s always time for a little catching up on the basics of PDQ machines, their advantages, and the fee structure, especially when small business owners are pondering whether they should buy or rent their machine.

Understanding PDQ machines

PDQ machines are an indispensable piece of hardware to add to the point of sale system of any shop so that credit card or debit card payments can be accepted. How they work in detail is pretty straightforward, no matter what the type of card machine used.

What is a PDQ machine?

PDQ card machine, PDQ terminal, or even just “PDQ”, there are many names for PDQ machines. But what does PDQ stand for? Quite simply: Process Data Quickly.

And that pretty much sums up what a PDQ machine does: authenticate customer credentials and validate a transaction for an amount specified by the seller, using a credit or debit card.

Most PDQ machine include, either on a standalone device, or as separated modules:

-  A card reader,

-  A keypad,

-  A display,

-  A printer.

There are now many different kinds of PDQ machines for small businesses as well as for large retailers: higher technological specs are not really the matter, in fact, what will change depending on how big the shop is rather the price and amount of fees the shop owner will have to pay. But we’ll get back to this later.

Types of PDQ machines for small businesses

Indeed, various types of PDQ machines are now widely available on the market.

One categorization can be made, depending on payment methods accepted by the reader:

Swipe payment used to be the only payment method accepted and is still the dominant mode in the US. The user has to swipe his card in the machine (usually on the side), so that the machine reads the magnetic stripe to authenticate the card and exchange data with the customer’s bank;

PIN payments now represent the overwhelming majority of payments in Europe. The card has a computer chip embedded on it, which is read by the PDQ machine to establish the connection with the bank. There is a keypad on the machine, or connected to it, so that the customer may enter his PIN (hence the alternative name for PDQ machines as “chip-and-PIN machines”);

Contactless payments have known an incredible rise in the 2010s, especially in Ireland. With this payment method, the customer doesn’t even need to insert his card in the PDQ machine to establish a connection;

Mobile payments go even further, as they don’t even require a card! The latest PDQ terminals also accept this kind of payments, like Apple Pay, Google Pay or Samsung Pay, simply by contactless data transmission with the customer’s phone, just like any other contactless payment.

Another categorization of PDQ machines for small businesses can be drawn based on the portability of the machine:

Countertop PDQ machines are the most widespread and basic credit card machines: they are directly, physically connected with the Point of Sale system or till, and sometimes have a separate card reader, keypad display and printer. They are suitable for every shop.

Portable PDQ machines or wireless PDQ machines are battery powered, standalone machines with the keypad, display, reader and printer, which use a wireless connection to the Point of Sale system. This can be a Bluetooth or Wifi connection, limited to a 30-metre to 100-metre radius range from the Point of Sale system and receiver.  They are perfect for bars or restaurants as waiters can take them to accept payments directly where customers are.

Mobile PDQ machines just look the same but rely on cellular signals to carry data. Therefore, they can be used basically anywhere mobile phone signals can be found. These machines either have a built-in modem or, like the most recent PDQ machines, connect with a mobile phone or tablet to catch the signal. They are particularly right for travelling salesmen.

How PDQ machines work

Besides a PDQ machine, a merchant account is an absolute must in order to be able to accept credit card payments.

Card payment processing requires the following steps:

-  Basically, the shop clerk enters the invoice data in the Point of Sale system or directly on the PDQ.

-  The customer does what’s required to authenticate himself or herself, depending on the payment method. This means keying in his or her PIN for chip-and-pin payment, swiping the card for swipe payment, or simply moving the card near the receiver for contactless payment.

-  PDQ connects with payment gateway to retrieve information from the customer’s credit card company or bank account to authenticate the transaction and allow it,

-  Payment gateway informs the seller’s merchant account about the transaction,

-  Information is then registered on the Point of Sale system,

Payment notification is given on the card reader,

-  Ticket is printed,

-  The customer’s account is debited,

The seller’s merchant account is credited,

-  Funds are then transferred to the seller’s business account.

Benefits of PDQ machines for small businesses

Although business owners often just consider the convenience they bring to customers, PDQ machines offer many benefits to small businesses, related to added convenience, but also to added security and additional business.


Even if Ireland is getting more and more cashless, more and more PDQ payments are being made every year, online or offline. It is estimated that 90% of the Irish population carry at least one credit or debit card. This trend is accelerated by the introduction of contactless payment cards, which most banks now offer by default to all their customers, therefore driving a very high adoption rate.

Shop owners just cannot refuse card payments anymore. If customers can’t pay with credit card, they’ll choose the competition and go to the other shop where they can, even if they could have paid in cash. They just want the convenience of credit card payments.


PDQ machines for small businesses also bring more security.

First, multiplying card payments and reducing the amount of cash in the drawer reduces the risk of theft (from staff or robbers) and limits counting errors. With no cash in the drawer, and therefore no reason for criminal attacks, the shop becomes more secure.

But PDQ terminals and credit card payments also bring more security in payments, are they are directly authorized by the banks or credit card companies. There is absolutely no risk anymore for the shop owner of not getting paid for the goods purchased: they just can’t be fooled like they can be with dud cheques or fake banknotes. The transaction is either immediately authorized, or not.

Additional business

With card payments now accepted even for small amounts, shop owners can actually count on card payments and PDQ machines to bring them more business.

Indeed, with e-commerce becoming increasingly prominent, impulse purchases are more and more often the only reason why customers would buy something in a high-street shop. And in fact, customers are reported to spend 20% more with their cards than with their cash.

Making payments easier has always been a strategy to gain more of these impulse purchases, and that’s exactly the logic driving the rise of contactless payments. Accepting credit cards is the only way to capture one’s share of these impulse purchases.

Also, it should not be forgotten that PDQ readers allow remote transactions, also called “cardholder not present” transactions. These represent even more additional business opportunities.

Budgeting PDQ machines

Card machine costs differ greatly based on a considerable number of factors. Even if the PDQ machine is actually purchased, using the machine requires service fees. These fees can vary depending on the financial services firm or bank, but also depending on business specifics of the shop which uses the machine. Probably the main decision to make is to purchase or rent the machine. But there again, PDQ machines for small businesses are now more affordable, because the market has changed.

PDQ machine fees

As they are part of a service package, PDQ machines come with many different fees, which can make it difficult to estimate their overall cost of use.

Typically, card machine costs usually include:

Monthly fees, which usually vary depending on the machine type. They may also vary based on several usage thresholds. In case the machine is rented, these monthly fees include rental costs. The usual scheme is that the “flat” monthly fee changes when certain numbers of transactions per month are reached. But the basic flat fee covers most usage patterns if the initial forecasting was correct. Monthly Minimum Service Charges often apply. Monthly fees usually cost anywhere between €10 and €50.

Transaction fees are almost always added to monthly fees, unless the monthly fee is “floating” as described above. This is how many new players get most of their revenue. Transaction fees can be flat, at a few pence per transaction, or variable, as a percentage of the price of every transaction made. This percentage is usually based on the profile of the business. Transaction fees usually also vary depending on the payment method or credit card network used by the customer.

Other fees may include:

Setup fees,

-  Exit or termination fees,

Customer service fees for the business customer.

Credit card machine rental VS PDQ terminal purchase

Purchasing a PDQ terminal is traditionally not the most popular option.

It’s true that there are quite a number of PDQ suppliers who can directly sell the machine to the business customer. However, PDQ merchant services, such as a merchant account, still need to be added so that the solution actually works. And the machine itself is usually quite expensive, although prices are falling. New machines cost anywhere between €200 and €800, depending on whether they are countertop, portable or mobile. If many transactions are made, the initial cost can be offset quite quickly.

Advantages of purchasing a PDQ machine for small businesses are:

Banks may charge less in transaction fees,

-  Customers are not as tied up with their banks as they would be if they were renting the machine

But a major inconvenience is that business customers usually still have to do all the software setup themselves, and when the machine is not covered by a guarantee, all the servicing, updates and maintenance.

The importance of the merchant account in credit card processing is the reason why most PDQ machines for small businesses are rented from high-street banks, as part of a package to record and process credit card transactions of the business owner, who keeps a business account in the same bank.

Benefits of card machine rentals seem attractive for small businesses:

an all-inclusive solution, software, hardware and financial services,

reasonable usage costs, which can be as low as €20 a month,

-  maintenance and assistance are included in the package,

free replacement with a more recent model when technology evolves is part of the deal.

However, costs may climb up quickly:

-  Some banks charge up to €30 a month for PDQ machine rental, plus transaction fees that can be as high as 5%,

-  Banks which do not charge for equipment rental will charge even higher transaction fees

In fact, transaction fees and monthly fees decrease proportionally with the number of transactions, which quickly makes PDQ machines for small businesses especially very expensive.

For all these reasons, new players have appeared on the market, precisely targeting small businesses. These financial institutions are not high street banks and produce their own PDQ machines, which are made to work with light, accessible, mobile point of sale systems. Their low-profile PDQ machines, usually just readers, simply plug into the merchant’s mobile phone, or connect wirelessly with it. The hardware is actually sold to business customers for a very low price compared with traditional PDQs, and simple, modern financial services including virtual merchant accounts are bundled. Considering the total usage costs of a PDQ machine, savings can be considerable.

It is therefore highly recommended to request as many  quotes in PDQ machines as possible to get the best deal for your business.