Credit card machines, originally called credit card terminals, are everywhere these days. It may seem difficult to believe that before 1979 credit cards didn't even have magnetic stripes. Today, electronic payment cards come in many varieties. These include traditional credit cards such as MasterCard, Visa, American Express, and Discover, as well as debit cards from a number of networks. Governments also issue electronic benefit cards, and many merchants now offer gift and loyalty cards. Not all credit card machines handle every type of card. As a merchant, you will need to consider which types of electronic payments you want to honor when selecting a machine.
One key decision is whether you want to accept PIN-based cards. Debit transactions can potentially save you significantly in bank fees, but only if you have a credit card machine equipped with a PIN pad. Fortunately, there is are many terminals that include PIN pads or allow the you to attach a separate PIN pad. This works well in situations such as retails stores where the credit card machine faces a clerk on one side of a counter and the PIN pad faces the customer on the other side.
Another key factor in selecting a credit card machine is how it will connect to the various processing networks. The original machines were known as dial-up, because each time a merchant wanted to get authorization for a purchase, the terminal placed a phone call to the network to exchange customer and authorization data. This normally takes between 10-30 seconds, with 15 being the typical speed today. Such speeds are fine for companies with low transaction volumes. Companies with higher volumes, such as fast food restaurants, convenience stores, and many entertainment venues will not want to wait that long for authorization. IP connectivity using an existing internet connection can cut the cycle time down to 3-5 seconds. Manufacturers also offer dual-mode credit card machines that use IP as the primary link but can also work in dial-up mode if there are network problems. These units can provide the you with the greatest availability and peace of mind.
With the rise of wireless networks and cellular data networks, manufacturers also began offering credit card machines that used wi-fi for IP connections and CPRS, CDMA, and other cellular network connections. Wi-fi operates at the same speeds as other IP links. Cellular operation works at the same speed as dial-up. However, for mobile service providers, such as towing service operators, home repair technicians, and trade show vendors, these devices allow them to achieve low interchange fees and chargebacks, which may well offset the additional equipment and cell service costs. Wireless credit card machines are becoming increasingly popular in restaurants, where servers can provide processing at the table, so that customers don't worry about “skimming” and other fraud that happens when they card leaves their sight.
The latest trend is the contactless card, which includes an RFID (radio frequency) chip instead of a magnetic stripe. Credit card machines with special readers can access the card's information when the cardholder brings the card within a few inches of the reader. These types of devices are currently used in only the highest-volume applications (due to additional fees and equipment costs), but may become more prevalent as the convenience culture evolves. There is some evidence that such cards increase the average amount of merchandise purchased.
There are many manufacturers of credit card machines, but the industry is dominated by three: Veriphone, Hypercom, and Lipman. Veriphone pioneered the industry with its ZON terminal, and today makes several lines of machines. Hypercom is the other major maker of dial-up and IP machines. Lipman has been the innovator in cellular wireless machines through its Nurit line. Merchant Services Group provides the guaranteed low price on credit card machines from all of these manufacturers. We can even help you figure out which solution is best for your business. For merchants who sell over the internet, we even have software-only solutions for e-commerce applications.
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