Payment terminal

A payment terminal, also known as a point of sale terminal, credit card terminal, EFTPOS terminal (or a PDQ terminal which stands for "Process Data Quickly"), is a device which interfaces with payment cards to make electronic funds transfers.

There are various types of terminals available to merchants, although most have the same basic purpose and functions. They allow a merchant to insert, swipe, or manually enter the required credit/debit card information, as well as to accept NFC Contactless transactions, and to transmit this data to the merchant service provider for authorization and finally, to transfer funds to the merchant.

Higher end models not only process credit and debit cards but also serve as a comprehensive customer engagement screen at the checkout. Common features include but are not limited to the ability to process gift cards, cheques, contactless and mobile wallet payments. Some are also programmed to accept store loyalty cards or allow the customer to use the pin pad to enter their information (ex. phone number) to redeem points. POS screens also allow retailors to advertise near the register when the terminal isn't being used. During the checkout process, many terminals are set to display a list of items purchased along with the running total. Other times, this functionality may be turned off or it may be used to supplement a dedicated screen that lists items being purchased. Some stores also use the terminal for customers to view and agree to the terms of a product warranty. Like ATMs, many POS terminals are also equipped raised tactile buttons and an earphone jack which allow the blind to audibly finish the payment process.

The majority of card terminals transmit data over a standard telephone line or an internet connection. Some also have the ability to cache transactional data to be transmitted to the gateway processor when a connection becomes available; the major drawback to this is that immediate authorization is not available at the time the card was processed, which can subsequently result in failed payments. Wireless terminals transmit card data using Bluetooth, Wi-Fi, cellular, or even satellite networks in remote areas and onboard airplanes.

A merchant can replace the functionality of dedicated credit card terminal hardware using a terminal application running on a PC or mobile device, such as a smartphone. They usually work with dedicated hardware readers that can transfer magnetic stripe data to the application, while there are also some that also work with smart cards (using technology such as EMV), although this is rarely seen on smartphone readers. In case the necessary hardware is unavailable, these applications usually support manual entry of the card number and other data. In addition, more and more devices are beginning to offer built-in RFID or NFC technology to accommodate contactless or mobile device payment methods, often without requiring additional external hardware.

By moving to the use of card terminals to directly capture card information instead of manually entering in card details, merchants benefit from the efficiency of decreased transaction processing times. In terms of security, major card terminal manufacturers usually offer software allowing end to end card data encryption. Still, there have been some cases of POS pin pad malware. In countries such as the US, where magnetic stripe cards aren't fully phased out, there have also been incidence of skimming at card terminals. That said, stand alone payment terminals are seen as superior to register attached payment methods because they don't require store cashers to take possession of the customer's card.

This page was last edited on 15 June 2018, at 03:02 (UTC).
Reference: under CC BY-SA license.

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