Credit card (CC) terminals or point-of-sale (POS) terminals are a
necessary piece of hardware at any store or business that accepts credit
cards. Usually, businesses purchase or lease credit card terminals from
their merchant account provider as that is more convenient. However,
there are other options. This article discusses some important points
regarding picking CC terminals.
Acceptable payment types in POS terminals
Before you start to look for a credit card machine, establish the payment types you want it to handle.
- Debit card payments: Does the POS
terminal accept credit and debit cards? Accepting debit cards is good as
it only incurs a transaction fee, not the discount rate. If yes, does
it have an internal or external PIN pad? An internal PIN pad is neater
than a hand-held but it also means customers will be handling your
terminal. External PIN pads cost around $100-$200.
- Electronic Check Conversions (ECC): If you want to
process paper checks electronically, you will need a check reader that
scans the MICR code and takes a snapshot of the check for record
keeping. It costs a few hundred dollars. The advantage of ECC is that
the processing time becomes much shorter. Plus, you don't have to bother
about keeping checks safely or depositing them, rejected checks are
reported quickly, and the deposit is made much faster.
- Loyalty cards: You may want to accept gift or
reward cards if you offer them as promotions to increase sales. Most POS
terminal software can be customized to accept such cards.
- Smart cards: Smart cards are the successors of
credit cards but not widely used yet. Apart from account information,
they store personal particulars on a chip. A POS terminal should have
the provision to integrate with an internal or external smart card
processor as this payment option will become popular in the next few
years. External units cost $100-$200.
- Check/ATM cards: Commonly confused with debit
cards, check/ATM cards work as both debit and credit cards. They are
recognized by the MasterCard or Visa logo on them. Save on the discount
rate by asking the card holder to enter a PIN while using the card.
- Electronic Benefit Transfer (EBT): If many of your
customers use food stamps and cash welfare benefits, your PSO terminal
should be able to accept them. Customers will need to enter a PIN, the
same as they do with debit cards.
Types of credit card terminals
Credit
card terminals can be integrated (all-in-one) or non-integrated.
Integrated terminals are compact, have an inbuilt printer, not as many
cables, and serve all your processing needs. The downside is the high
cost and the hassle of not being able to use the unit if it's printer
develops a snag. Non-integrated POS terminals are bulkier as the PIN pad
and printer are external. There are more cables to hide but the cost is
lower.
Purchasing or leasing a credit card terminal
New
POS terminals could be expensive. If your budget is tight, you can
consider purchasing a refurbished terminal. These are used terminals
that have been fixed up by the manufacturer and sold at a discount.
Warranty for such units is similar to that offered for new terminals. If
you don't mind some blemishes, this is a good option.
You can
also choose between leasing and purchasing a POS terminal. The cost of a
basic terminal falls cheaper than a lease as providers only have long
lease contracts (48 months) that cannot be cancelled, and you pay sales
tax and security against loss or damage.
The best place to install a terminal
The location of a POS terminal is important for the convenience of customers. The terminal should:
- be located strategically for faster checkouts
- allow customers to access PIN pads easily
- be close to a telephone jack
- preferably have a small footprint
Businesses should also have a secondary phone line so they do not lose any customer calls while the terminal is operating.
Some
of the popular brands that manufacture POS terminals are VeriFone,
Hypercom, and Ingenico. They offer simple credit card processing to more
sophisticated models. Match your business needs with available features
and select a credit card terminal that will serve you satisfactorily
for the next few years.
