What is a PDQ Machine?
PDQ stands for “process data quickly”, and it refers to card machines, Chip and PIN machines, or card readers. If you want to accept card payments face-to-face, you’ll need a PDQ machine. In 2020, there’s a large number of PDQ machines available and they’re tied to a wide range of payment processing offers for business.
This article is designed to explain what a PDQ machine is, and to distinguish between the different types of PDQ machines, and suggest what should be important to you in PDQ machine selection. Your choice of payment processing contract is likely to inform the selection of PDQs available to you, and we’ll also explain how that relationship works.
One note – on the etymology of “PDQ” for card readers… us neither. It’s popular as a term in the UK and Kenya, and nowhere else.
PDQ Machines and Payment Processing Choices
Before diving into the specifics of PDQ machines, it’s worth backing up and explaining your payment processing options.
You can choose between a contract with an acquirer like Worldpay, and a pay-as-you-go mobile card reader provider like iZettle.
Verifone, Ingenico, Pax Technology, Datecs, and Muira – these are examples of card reader manufacturers which partner with acquirers. If you open a relationship with this type of processor (e.g. barclaycard, worldpay, vantiv) your processor is likely to partner with a single manufacturer, (e.g. Verifone). You’ll therefore be offered a range of card readers by Verifone, which only differ by cost and connection type (see below).
Square, Sum Up, iZettle, PayPal, Shopify Payments – these are payment processors, and they have decided to manufacture their own mobile card readers. If you browse these providers, you will de facto choose their card reader and their processing contract at once. This group of providers usually have a flat headline rate of between 1.5-2.75%, although they do negotiate with larger merchants despite popular perception.
Which payment processor?
You can understand the differences between processor fees here.
To generalise, businesses which are very small or businesses with a low transaction size (e.g. coffee shops) are better suited to payment facilitators; whereas companies which process more than around £5,000 per month and have a medium or large average transaction size (over around £8.00) are better suited to acquirers.
If you’re confused, talk to StoreKit, and we can do a quick calculation and let you know which rate we think would suit you better. We offer both types of payments, so we have no incentive to push you to one or the other.
PDQ Hardware in Acquirer Contracts
If you choose an acquirer, and you successfully execute a bidding process, you’ll be offered a choice of card reader from one manufacturer.
The UK PDQ market is dominated by two manufacturers, whose terminals you will find in almost every high street or supermarket brand; Verifone and Ingenico. StoreKit partners with Ingenico, so if you choose StoreKit payments merchant account, you’ll be offered different Ingenico card readers.
The following companies manufacture PDQ machines for acquirer contracts:
|UK PDQ Manufacturers|
PDQs typically fall into one of four categories; countertop, portable, mobile or mPOS. Although this distinction is starting to blur with the introduction of the new low-cost card readers and “smart terminals”, which include more advanced functionality in one device, it still functions as a good way to categorise different machines. You can find a more comprehensive list of all approved terminals at the UK Card Association.
Factors to inform your choice
Once you’ve chosen a merchant account provider and negotiated a rate, you just need to choose your card reader from a list your acquirer will give you. Your choice might depend on the following factors:
Price – the obvious factor is price. Terminal rental fees tend to vary depending on the age of the model, how good it looks (which is usually tied closely to the age of the model) and the connection type and portability, whereby less flexible pdq machines are a bit cheaper. Depending on the model and your provider, the rental price can range from £15 or so per month up to £45 per month.
Aesthetics – we do not believe that card reader aesthetics are trivial! An experience in a shop or restaurant depends on all the style touchpoints, including the pdq machine. Unfortunately, most pdq machines in this category are ugly. And, pdq machines age like butter rather than wine – older models don’t quite look as sleek as they should. Newer models tend to be prettier.
Integrations – we will cover integrations in more detail below. “Integrated” payments can transfer data with your EPOS terminal, meaning that you only need to press a button on the terminal to cue the correct price on the reader. Otherwise, you’ll be entering the goods into your ePOS, and then typing out the price on the card reader – like you’d expect in a full-service restaurant. You would need to ask your acquiring bank about
Connection Type – there’s three connections here. Your card reader may need to connect to your ePOS terminal if you want to integrate it. It needs to connect to the internet, although this could be via your ePOS terminal. And finally it needs to connect to power, or have a battery.
Different PDQ machines by Connection Type
Below we’ll list some example readers – you can find a more comprehensive list of all approved terminals at the UK Card Association.
Countertop PDQs rely on a physical data connection and will be plugged directly into your phone or broadband line. You’ll find these terminals in quick service, fast food and retailers on the high street. Countertop PDQs are typically the fastest to process a transaction as wired networks reduce latency between the machine and the payment gateway.
|Verifone VX 820||£450+ / £26 pm|
|Verifone VX 520||£250+ / £20 pm|
|Ingenico iCT 250||£300+|
Portable PDQs are made up of two parts; the card machine, and the wireless base station. You’ll usually find these terminals in table service restaurants and bars & pubs who need the flexibility to take payment at the table, or away from the counter. These PDQs include a rechargeable battery and Bluetooth or WiFi connectivity to the base station, allowing remote operation of up to 50-100 metres around your hospitality premises.
|Verifone VX 680||£450+ / £26 pm|
|Ingenico iWL250||£450+ / £22 pm|
Mobile PDQs are defined by the ability to process payments without the requirement for a local network connection, instead relying on a mobile 3G or GPRS internet connection. Similar to portable terminals, they include an internal rechargeable battery so you can take payments on the go. Internet connectivity is provided by an embedded data-only SIM card which will usually add a small monthly charge to the cost (around £1-3 / month).
|Verifone VX 675||£250+ / £23 pm|
Integration for PDQs with Acquirers
To actually process transactions, you’ll need more than just the PDQ machine itself. The software that runs on the machine is responsible for; displaying the total amount due, reading the card magstripe, chip or NFC data, encrypting this and transmitting to the payment gateway amongst other features.
Most PDQs used by small business are non-integrated. This means the PDQ machine has no connection to the point of sale system and requires manual entry of the amount to be paid. Non-integrated PDQs will run software provided by your merchant bank, ISO or the stock software that it ships with.
Integration can vary in definition, but in general, it describes a link between the PDQ and the EPOS system. At its simplest this means that when you hit pay on your POS screen, the amount due will be sent to the card machine so the customer can pay immediately. Integration was historically only available to large businesses and corporates, but in recent years this functionality is now available to small business at reasonable cost. More advanced integration is also possible, especially for pay-at-table hospitality venues where split bills, tips and table management can speed up service.
PDQ costs can be broken up into 2 parts, the cost of the physical hardware and the transaction costs. Transaction processing costs can be a complex affair and better covered in our article on card processing costs. However, PDQ costs also have their complexities with two options for purchase:
A “payment application” is the bit of software which allows the PDQ to communicate with the PDQ machine. You can get a payment application from anybody – whereas some software brands include it as part of their package, and Ingenico themselves produce some payment applications, small software houses can also write payment applications. You’d tend to have to pay monthly for it if you buy it from a separate provider.
However, a payment application always needs to be “certified” by your payment processor. That’s the acquiring bank which fulfills the transaction, not the company which may have sold you the contract and branded it. (What’s the difference?) So it’s worth checking in with your processor and asking whether it’s certified.
It also helps if the software brand whose ePOS software you’re buying gives it the thumbs up, which would make it an “official” integration. Ask StoreKit if you need any help!
mPOS PDQ Machines
In recent years, a new type of PDQ has gained popularity among smaller merchants. The mPOS terminals, including; the Square Reader, iZettle Card Reader, PayPal Here Reader, etc. can be thought of as a combination between portable and mobile PDQs. Whilst mPOS readers require the modern equivalent of a base station; a smartphone or tablet, meaning they still rely on a separate device for their internet connection, they can be used both in-store as a countertop machine and at pop-ups and field sales as a mobile PDQ.
|PayPal Here Reader||£29|
Other ways of taking payment
For food and drinks orders, you could also consider using an Order & Pay system. This is a kind of system which allows you to take orders to tables – a QR-based menu which enables customers to take orders from their phone.
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