A payment terminal (often referred to as a card payment terminal) is a device that allows businesses to accept payments via credit and debit cards. They can be countertop, mobile, or integrated as part of an overall point-of-sale/POS system.
They allow businesses to process customer payments using various payment methods, such as card payments as well as contactless payments like Apple Pay, Google Pay, and Android pay.
It acts as a mediator between the customer's card, the merchant, and the payment processor - securely transporting transaction details.
The most prevalent type of payment terminal is the EMV (short for Europay, Mastercard and Visa: the three companies that created the EMV standard) terminal, which accepts chip card transactions. EMV technology offers more advanced security than traditional magnetic stripe cards. This type of terminal generates a unique transaction code for each payment, reducing the risk of fraud.
Types of payment terminals
Countertop payment terminals
A countertop payment terminal is a compact device used by businesses in a fixed location to accept payments via debit or credit card, including contactless transactions, as well as cash payments.
The terminal consists of a keypad for inputting payment information, a card reader for swiping and inserting cards, and a screen that displays transaction details. They can also be connected to a separate PIN pad for chip-and-pin transactions and barcode scanners to conduct transactions.
They are often integrated with POS systems to streamline payment processing.
Countertop card machines are equipped with various features to enhance the payment for both customers and merchants.
- Secure transactions - This card machine employs encryption technology to safeguard sensitive card data, such as an account number, during transactions.
- Compatibility - They are compatible with various payment methods including chip cards, Apple Pay, and Android Pay.
- Receipt printing - Countertop card machines have the ability to print receipts for customers, providing a physical record of the transaction.
- Connectivity - They offer multiple connectivity options, such as Ethernet or Wi-Fi internet connection, to guarantee a seamless connection to card networks.
- User-friendly - Its intuitive interface and easy-to-use buttons are designed for smooth operations for both employees and customers. It also means they can be adapted for a self-checkout service, which is exceedingly common with 74% of businesses now using automated checkouts when taking payments.
Countertop payment terminals are most commonly used in retail stores, restaurants, and other establishments where face-to-face customer transactions are made.
Mobile payment terminals
A mobile payment terminal is a smartphone, tablet, or wireless electronic device that performs the function of a countertop payment terminal wirelessly.
The card machine can accept payments anywhere that a mobile network, such as 4G or 5G, is present. Its functionality is made possible through the integration of a roaming SIM card and GPRS technology.
These payment terminals are ideal for merchants that need to conduct transactions in different locations and are 'on-the-go'.
As they are inherently mobile and require very little infrastructure. Mobile card machines are commonly used by business vendors that work in a stadium, market or festival setting.
Mobile POS systems move the sale to the customer - overall improving customer service due to the reduction in wait times.
Integrated Payment Terminals
Integrated payment terminals are payment processing systems that are fully integrated into the merchant's services. The terminal is connected directly to the POS system and all transactions are processed through the terminal.
It can also be applied to a virtual terminal and payment gateway, allowing for transactions to be within an app or software at no extra inconvenience.
Instead of customers having to input their personal data each time they make a purchase, an integrated payments system stores their information, so it only has to be inputted once - making financial transactions easier and more convenient.
It stores transaction and payment history, offering advanced features such as inventory management and sales analytics.
How payment terminals work
A payment card terminal uses a combination of hardware and software to process transactions - accepting various payment methods, including chip and pin cards, contactless cards, and mobile devices.
They can also be connected to the internet or a phone line to process payments.
Processing a transaction consists of four key stages:
- Stage 1: When a customer presents their card, its chip sends the transaction details to the merchant bank account. This sits separately to the business bank account, holding the funds until the transaction process is complete.
- Stage 2: The merchant bank sends a payment request via broadband internet connection or phone line to the customer's card provider - typically Visa, Mastercard, or American Express.
- Stage 3: The card provider then requests payment authorization to the customer's issuing bank or card provider.
- Stage 4: During the final stage, the transaction will be approved if the card details are correct and there is a sufficient amount of money in the customer's account; or the payment may be declined if the card details are incorrect, or if the customer has insufficient funds available.
It's important to note that it is possible for a transaction to decline due to a break in internet connection or a program failure. In this instance, the payment process will start over again.
Benefits of using a payment terminal
Increased payment options
Using a card terminal gives customers the option to pay with the payment method of their choosing - whether that be electronic payments or chip and pin.
Giving consumers choice is more important than ever before, with 71% of customers being more likely to make a purchase if various payment methods are available.
Doing so, ensures that merchants aren't turning away any potential business.
Bigger purchases
When paying with card, 58% of consumers said that they are likely to spend more compared to spending with cash (23%).
So, providing a card payment option could mean an increase in sales for businesses.
Quicker Transactions
Thanks to payment terminals, card payments are a far quicker process than when customers pay with cash.
The exact amount is paid upfront straight from the card to the merchant, which is far more efficient. When paying via contactless, the transaction is even quicker.
Security
Taking card payments is far more safe and secure than only taking cash - for both the customer and the business alike.
Customers don't feel comfortable carrying large quantities of cash, reinforced by 29% of customers stating that they feel safer carrying card.
It is also far more secure for businesses not to have large amounts of cash on site all day. Figures in the UK show that businesses have lost a staggering £12.9 billion to burglaries and theft in the last year. Having less cash on site can help mitigate this risk.
Despite there still being some security issues associated with card payments, if the merchant is fully compliant with regulations, it is increasingly safer than cash payments.
More hygienic
Card payments are far more hygienic than paying with and accepting payments with banknotes and coins.
Cash can contain potentially life-threatening bacteria, with 19 different bacteria found across UK notes and coins.
A card terminal reduces the number of touch points between the customer and the merchant, and the card terminal itself can be easily cleaned with anti-bacterial products.
Payment terminal security
Payment terminals offer enhanced protection through advanced security measures to protect transactions. Businesses can trust that their payment terminal is secure and reliable.
Security is boosted through a number of means:
Software & firmware
Software and firmware are programs that run on payment terminals, enabling them to communicate with the merchants' payment processor, network, and other integrated systems.
Regularly updating this technology ensures that businesses have the latest security patches, bug fixes, and features to prevent suspicious activity, such as hackers and fraud.
Avoid using outdated and unsupported software/firmware to remove the risk of security flaws.
Data encryption & tokenization
Encryption is the process of converting data into a code that can only be read by authorized parties that have access to the decryption key.
Tokenization is the process of replacing data with a random string of characters that has no real meaning or value.
Encrypting and tokenizing data, through a payment terminal, protects sensitive customer data from being stolen, intercepted, or misused by fraudsters or those without authority.
Payment terminals encrypt and tokenize data at every stage of the payment process, from the point of transmission to capture.
Industry standards & regulation
Payment terminals are complaint with industry standards like PCI and EMV.
EMV stands for Europay, Mastercard, and Visa - it is a global standard for chip-based payment cards and devices. These devices have a microchip that generate a unique code for each transaction, making them more secure than legacy magnetic stripe cards, which can easily be cloned or skimmed.
PCI stands for the Payment Card Industry. It is a set of security standards for handling cardholder data. PCI standards include requirements for network security, access control, monitoring, testing, and reporting.
EMV and PCI compliant terminals reduce the risk of fraud, liability, and fines.
Choosing the right payment terminal
To select the right payment terminal, businesses should consider their specific payment processing needs, the type of payments they want to accept (including debit, credit, and contactless payments), its security features, and if it is compliant with industry standards.
It's important to research different payment providers, comparing their features and pricing. Evaluate your processing volumes when doing so, as processors may charge a mark-up based on transaction value.
Payment terminal costs & pricing
The cost of a payment terminal can significantly vary depending on the type of terminal and the provider.
Card terminal costs can include a variety of fees, these may be monthly fees or transaction based. Fees can include:
- Set-up fees
- Exit fees
- Chargeback fees
- Monthly account fees
- Minimum monthly service fees
- Card transaction fees
- Fixed fees
- Transaction authorization fees
- Credit card transaction charges
The cost of these fees can significantly vary depending on:
- Business profile of the retailer accepting card payments
- Payment method used
- Type of card used
- Card network
It's important to look for providers that offer transparent and competitive pricing - merchants should be wary of hidden fees.
Setting up & using a payment terminal
Setting up your payment card terminal correctly is important. Although this may seem difficult to do, terminals are easy to set up and use - even for those without technical expertise.
Payment providers offer online resources, guides, and manuals to help merchants set up their payment terminal. If they are still struggling, many offer 24/7 phone support for any issues they may have.
How is a payment terminal set up?
- Step 1: Set up the broadband connection being used for the card machine. A dedicated phone line is not necessary, but a reliable one is.
- Step 2: Insert the thermal paper receipt roll into the reservoir, typically situated at the back or bottom of the machine.
- Step 3: Place the paper roll into the printer's receiver. This is a good time to do a printing test.
- Step 4: Test the machine by making a card payment, ensuring it can seamlessly make a transaction.
Depending on the organization, payment terminals can be customized to meet the specific needs of a vendor. For example, those looking to streamline their bookkeeping processes could have accounting software integrated into the terminal.
Payment terminal customer support
Most payment providers have a customer support team dedicated to providing merchants with prompt and efficient customer service.
On-demand customer support provides businesses with:
- Online resources and guides to help with troubleshooting and terminal set up
- 24/7 365 phone support worldwide to help merchants within their region
- Specialist support to assist businesses with operation and execution
Payment terminal providers
Nuvei is a provider of global payment services including point-of-sale (POS) hardware terminals.
Its terminal technology offers:
- 200 supported countries, with direct local acquiring in 47 different markets
- 700+ alternate payment methods
- 150+ supported countries
- The ability to customize a solution to a merchant's specific requirements
- Feature interoperability
- Full service payment orchestration abilities
- Fully transparent, real-time granular reporting
- Fully agnostic
- Human customer support 24/7 365
Choose Nuvei for state-of-the art payment terminal technology.
Conclusion
Understanding the diverse range of payment terminals available today is important for businesses looking to enhance their payment processing capabilities.
From countertop models that offer reliable, fixed-location service to mobile to integrated solutions that prioritizes flexibility and convenience, each type of terminal provides unique benefits tailored to specific operational needs.
Prioritizing security through compliance with industry standards like EMV and PCI DSS as well as selecting a provider that aligns with your business goals, can ensure smoother, more secure transactions.
By carefully considering your options and setting up your payment terminal correctly, you can significantly enhance customer satisfaction and operational efficiency.
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