Payment Terminals

SlashMyFees platform has many mentions to a credit card terminal, so we wanted to explain that term in more detail. A credit card terminal, also known as a point of sale terminal, payment terminal, EFTPOS terminal is a device which interfaces with payment cards to facilitate electronic funds transfers.

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

A few general facts:

  • Most newer model terminals not only process credit and debit cards but can also handle gift cards, checks, and such.
  • The majority of card terminals transmit data over a standard telephone line or an Internet connection (either wired or wireless).
  • Some also have the ability to cache transactional data and transmit the data to the gateway processor when a connection becomes available when immediate authorization is not available at the time the card was processed
  • Some remote wireless terminals can even transmit card data using either cellular or satellite networks.

So the remaining question is, does every merchant who needs to process cards need a terminal and the answer is no.

A VeriFone credit card terminal can handle those same functions without a physical terminal. Using a personal computer (PC) or smartphone with appropriate software and reader device, a merchant can replace the functionality of dedicated credit card terminal hardware using a terminal application running on a PC or smartphone. These terminal applications usually also support manual entry of the credit card numbers.

These applications may work with hardware readers that can transfer smart card chip information to the application. However, most of the credit card readers that are available for smartphones are only able to read the older magnetic stripes. Some smartphones offer built-in NFC technology and can be used as card terminals for contactless payment cards without requiring additional external hardware.

We have to advise you though that PCI DSS requirements also need to be considered when selecting terminales hardware or software since unsecured and unencrypted systems based on generic or open platforms may not be compliant with cardholder data security - integral to mandatory merchant PCI compliance. Several high-profile breaches resulting in the mass theft of cardholder data have occurred in the past where people have accessed data stored insecurely on bespoke or custom systems operated by merchants.

Finally, since it is our single goal to reduce your processing fees at SlashMyFees, we have to inform you that you could obtain lower processing costs by processing chip cards instead of magstripe cards and by using card terminals to capture directly card information instead of manually entering in card details. This provides an efficiency benefit of decreased transaction processing times as well as reduced fees.