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If you are a seasoned business owner or a veteran employee in a retail business, questions like “do you accept Apple Pay?” “do you accept credit cards?” or “do you have a contactless payment?” are never new to you. Those modes of payments are just as common as accepting cash. Lucky are you if you invest in learning and using these payment methods! But if you aren’t, your business is in trouble, believe me. As an owner, you have to understand the value of the payment terminal in your business. You always have to remind yourself that each customer has preferred methods of payment, and when a store offers solutions to those preferences, customers more likely to give them business and advertise via word of mouth. On the contrary, if you don’t offer enough options to your customers, they may complain. Thus, your operation comes to a halt.

Striking the Right Balance Between Cost and Convenience

You might think that acquiring a payment terminal is just an added cost to your small business. But failure to offer convenience to your customers might be the biggest and quickest thing that can pull your business down. This is because customers’ topmost priority in buying is their convenience, particularly in paying. Thus, considering the competition, businesses (almost of all sizes) are offering all types of payment options. And that includes a payment terminal. As a business owner, you must be on the loop.

What is Payment Terminal?

A payment terminal, also known as a point of sale or POS system and credit card terminal, is a device that interfaces with payment cards to make electronic funds transfers. Indeed, a convenient and quick way to pay and accept payment. Swiping or tapping the card of your customers or holding their phones under a scanner is easy enough to understand, but knowing how payment terminal works beyond our sight is a different story. We know it’s complicated so to give you a clear picture of the process, here’s a rundown of what you need to know about how the money travels to complete a transaction.

How Payment Terminal Works

Credit and debit cards issued in the United States all have a Europay, MasterCard, Visa or EMV chip in them. The shift to EMV payments was prompted by the demand for increased safety and elimination of fraud. Card information with EMV chip is harder to copy because they are small bits of encrypted data that changes with every purchase. This is unlike the magnetic stripe cards where data remains the same for every payment. As a result, many customers preferred to tap their cards rather than swipe them.

Payment terminals that accept credit cards with EMV chip complete the payment internally. However, since transaction codes vary from payment to payment, the payment verification process in EMV payment terminals takes a few more seconds than with the magnetic stripe cards. The internal transaction that had occurred was the transfer of banking details from the cardholder’s financial institution to the acquiring bank. Here are the financial institutions involved to complete a transaction:

Issuing Bank – The financial institution or other entity that issued the credit or debit card to a cardholder.

Payment Processor – The payment terminal that takes information from a credit card.

Payment Gateway – This institution is typically most helpful for e-commerce sites because the card is not present in the store at the time of purchase. It’s simply an added security check.

Acquiring Bank – It acquires funds for its merchant from a customer by processing credit card transactions.

Chip Readers, Magnetic Stripe Readers, and Near Field Communication

We understand that acquiring new software and hardware to house every type of payment can be costly. Most stores, especially those who just get started, can’t accept all types of payments just yet. The good thing, though, is that many POS systems accept various forms of transactions.

Most EMV terminals accepting credit cards with EMV chip still have the option to swipe. So if your customer carries a chip-enabled card, he/she should tap their card. Although the magnetic stripe still works, it should only be used in terminals that don’t have chip technology.

Near Field Communication or NFC is generally used for mobile credit card processing, but can also work with chip technology. This process offers customers frictionless payments.

Wireless, Wired, and Unattended

The stationary payment terminal is the most common. It has been used for many years by almost all well-known businesses. It’s perfect for shops with stationary checkout counters where customers buy the items and swipe or tap their card on a wired machine that electronically transmits data.

Furthermore, wired or countertop terminals are the ideal device type for several businesses. For small or medium-sized businesses with a single checkout area and POS system, this is your ideal choice. These terminals are directly connected to your POS solution, offering quick processing speeds and simple connectivity.

On the other hand, mobile credit card processing is fast becoming the most efficient way to process a transaction. Customers will no longer wait in long lines to buy a product. Typically, a business will have a payment terminal that attaches to a company mobile phone or to a small white box that allows contactless payments.

Wireless terminals are handheld devices that can be used without a wired-in connection to a POS system. Unsurprisingly, this is the most popular choice for many businesses, across many industries. Given that this terminal can be brought directly to the customer regardless of location, this is becoming the to-go choice of restaurant owners and delivery-based services. In retail stores, wireless terminals can be used to line bust during busy periods, and won’t intrude on vital countertop space.

Unattended kiosks have also been on the rise inside places such as fast-food restaurants because of their ease-of-use for the customer and their ability to speed up the ordering process. This terminal allows people who know they are paying with a credit card to complete their orders quickly and without speaking to a cashier.

Payment Terminals Benefits to Consumer

Payment terminals offer customers more payment options. By using a terminal, business owners don’t have to worry their customers about carrying cash in their wallets and give them options whether customers want to use a digital wallet or a credit card to pay. It gives your customers full autonomy over how they pay. This gives them the feeling of being heard and valued.

Payment Terminals Benefits to Business

The most vital benefit payment terminal offers a business is security. Payment terminals are designed to accept credit, debit and digital wallets equipped with NFC technology, magnetic stripes, and encrypted chips. Thus, data is encrypted as it travels from one financial institution to the next, which means it can’t be decrypted until it reaches the acquiring bank. Further, payment terminals expedite the purchasing process and minimize long lines. This goes without saying that using payment terminals leaves customers satisfied and happy.

Are you now in search of the right payment terminal? Contact us today!

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FIELD SERVICES

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RETAIL

The retail environment has evolved rapidly in the past years. To keep with the pace and increase your bottom line, you need to integrate a platform providing a full suite of card payment systems that fully satisfies the needs of you and your customers. CloudBanking’s payment solution for retail industry is here to help you stay in the game and be more competitive.

 

Powered with the latest technology, our credit card processing solutions allow retailers to accept any form of card payments such as credit cards, debit cards, and EMV-compliant cards. Our payment solution for retail industry can help you effortlessly manage your point-of-sale transactions while you boost your retail sales.

PROFESSIONAL

CloudBanking offers a customized payment solution for professional services companies, such as law firms, insurance agencies, and accounting firms. Our platform is designed to provide you a safe, convenient, and secure way to accept your service fees and lessen the administrative cost related to payment processing.

 

We understand that your business’ payment processing needs are unique. So you can’t just rely on any payment processing platform to manage your cash flow. You need a trusted partner to receive payments fast, secure, and easy. Enjoy this hassle-free process when you integrate our payment solution for the professional services industry.