Credit card terminals - buyer's guide

Credit card terminals are now a common feature at small and big stores, restaurants, beauty parlors, hospitals, and almost every other business place that handles customer transactions. Businesses have opened their doors to credit card payments in a big way and credit card terminals are an indispensable part of it.

A credit or debit card is swiped through a credit card terminal for authentication. Such transactions are processed at a lower rate than cardless transactions because they are low-risk. The cost of the equipment is easily offset by the savings you make on the extra you pay for cardless transactions.

Credit card payments increase sales significantly and more than make up for the fee you pay the credit card processor. Customers prefer to make large purchases with credit cards and tend to spend more money with you as they are not restricted by the cash in hand.

The right time to purchase a credit card terminal

Once you have set up a merchant account, you are ready to accept credit cards. If you haven't purchased a credit card terminal yet, now is the right time. The cost of a credit card terminal is reasonably low and even small businesses can purchase one.

If you already have a credit card terminal, make sure it can process credit cards, debit cards and other cards such as gift cards if you see these frequently. If the terminal is reading data incorrectly, forcing you to key in information, it's costing you time and money. Also, if you're planning on expanding your business, you will need more credit card terminals.

Types of credit card terminals

Credit card terminals can be typically classified into four categories - traditional (wired), wireless, virtual or software- based. Some of the terminals may have in-built printers though many are just connected to an external printer.

Traditional credit card terminals

The standard components of traditional terminals are the magnetic stripe reader, a display screen, and a keypad to enter price and other details. Displays are measured in lines x columns. A typical display of 8 x 20 lets you see basic information. A larger display will show more information in one screen. Backlit displays come useful if the lighting is poor; this is a standard feature.

Printers can be inbuilt or separate. Cost wise, the difference is negligible. Having separate equipment for each function does give you the flexibility to use one if the other breaks down.

Keypads come in different sizes and number of keys. If there are more keys, a single key can be set to perform common functions. Large keypads are easier to use than smaller ones.

Wireless credit card terminals

These terminals are useful for businesses where transactions are done on the move such as taxi drivers, seasonal businesses with impermanent offices, and businesses that put up temporary stalls to sell off surplus products. These businesses improve their sales appreciably by accepting credit card payments. Wireless models are more expensive than their wired counterparts and should only be purchased if the business demands it.

Wireless credit card terminals have inbuilt printers. Important considerations in selecting a wireless terminal are weight, range, and battery life. The equipment should also be impact resistant as it can get dropped or knocked about while being carried around.

Virtual credit card terminals

Virtual terminals or software-based terminals are not physical entities. Your merchant account provider or credit card processor sets you up with software that handles the credit card transaction. Typically used by e-commerce websites and mail or phone order businesses, these transactions involve the manual keying in of credit card number and other information. Such transactions are considered riskier than card swipes as they are more prone to credit card fraud.

Desirable characteristics of credit card terminals

Credit card terminals come with various features that make it easy and safe to use. Some of the typical features include:

  • Inbuilt printer: Many terminals come with inbuilt printers. This is convenient for businesses that do not already have a printer in place. Inbuilt or separate, you have to decide between dot matrix, thermal and ink-jet printers.
    1. Dot matrix printers print on regular paper using pins and an ink ribbon that needs to be replaced periodically. Though not very costly, they print at a low speed of 1-4 lines per second.
    2. Thermal printers use heat to print on heat sensitive paper called thermal paper. These printers make less noise, are more reliable, and print fast at the rate of 10-15 lines per second.
    3. Inkjet printers are rare as they offer neither speed nor low cost. The only advantage is their capability to print colors.
  • Drop-in paper loading: Some inbuilt printers include a drop-in paper loading feature that avoids delays in changing paper when customers are waiting.
  • PIN pads: Most credit card terminals also accept debit cards. Customers have to enter a PIN to make payments with debit cards. This can be done directly on the terminal or a separate PIN pad. PIN pads are preferable as the customers can key in this private information without the fear of being spied on and the terminal stays safe under the payment counter.
  • Additional payment modes: Some credit card terminals also allow payments with gift cards, electronic bank transfers, and phone cards. If you see these kinds of transactions commonly in your business, select a terminal that supports these modes of payment.
  • Security features: Credit card terminals that include the Address Verification System (AVS) feature match the address on the credit card with that on the credit card holder's ID. This is an additional security measure that checks credit card fraud. Make sure AVS is provided with your credit card terminal.
  • Merchant account independent: Contrary to what merchant account providers may imply, credit card terminals can be used with any merchant account service. The terminal has to be programmed to the right credit card processor. Do not feel obliged to purchase the terminals from your account provider unless you are convinced of their worth.
  • Terminal memory: A record of transactions is stored in the credit card terminal's memory. Memory of 256 kilobytes can hold records of up to a thousand transactions and proves useful for verification when you cannot connect to your merchant account provider.
  • Flash memory: Some credit card terminals store the software they run with on flash memory. This enables quick and easy download of software upgrades and their installation, thereby extending the equipment's operational existence.

Purchasing a credit card terminal

Credit card terminals in themselves are quite reliable. Reliability can be quantified by measuring the mean time between failures (MTBF) or the mean cycles between failures (MCBF). On an average, the MTBF is 2 to 4 million transactions. Most terminals come with a 1 year warranty. This is helpful if there is a technical fault in the equipment. Apart from that, credit card terminals work quite well for long periods.

Credit card terminals can be purchased from your merchant account provider, store, or e-commerce outlet. The good part of purchasing a terminal from your account provider is that they will pre-program it for you. Since you are already doing business with them, they may offer discounts and not try selling you the costliest model. If you are purchasing the terminal from a store, you need to look at the model, features, and price and not the vendor. The terminals are reliable and low costing. In all probability, you will not need the services of the vendor after the purchase. Be cautious in buying a terminal online. Verify the repute of the internet company and check their return policies, warranty, and service agreements.

Prices of credit card terminals

Credit card terminals are a lot cheaper than setting up a merchant account. You should select a terminal that has all the features your business may need currently and possibly in the future. The cost of terminals is low and investing in a reliable piece of equipment will help your business in the long run.

Traditional terminals cost $150 to $300. Inbuilt printers raise the price to $200-$600. Wireless terminals cost higher in the range of $600-$1000. The type of inbuilt printer also influences the total cost of the equipment. Dot matrix printers cost from $200 to $400. Thermal printers cost from $300 to $500. Though thermal paper is costlier than regular paper, the total cost over the years equals the operational costs of dot matrix printers.

Credit card terminals are hardy and they will be with your business for a long time. Slow or erroneous terminals will impact your business negatively so take time to verify features, functions, and reviews before buying one. If you purchase the terminals from a local store, you can also get some training on the basic and advanced features of the credit card terminals and their maintenance.

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