Although card payment machines come in four categories of models, the good news is that there is a remarkably small number of vendors now, so choosing the right hardware has become relatively easy. However, if small businesses are now perfectly legitimate users of these machines, interested business owners should note that a card payment machine is not just a device that they can purchase over the counter and plug it into the business’s till to start accepting credit card payments. Understanding the basics of an electronic point of sale (ePos) system is a necessary preliminary before the any equipment can be considered. To make it simple, accepting card payments require a choice of hardware, a choice of software, and the choice of several service providers.
Commercial banks, which also provide the merchant accounts needed to accept card payments, are by far the largest source of card payment machines - but no longer the sole one, as payment gateways are now proposing alternate options.
Choosing the right hardware: current card payment machine categories and suppliers
There are four types of PDQ terminals:
- Countertop terminals are stationary and will typically be wired to the business’ till;
- Portable terminals are wirelessly connected to the till so as to be used anywhere within the premises of the point of sale;
- Mobile terminals use cellular networks so they can be used anywhere a mobile phone signal;
- Online Payment Solution (payment via website).
Choosing the right software: a key question to integrate card payment machines within an ePos system
As connected devices, card payment machines are part of a bigger system to process and record the sale. The system is called the electronic point of sale (ePos), and may have many components beyond the mere PDQ terminal: an ePos till or cash register, a barcode scanner, a printer, a scale, etc. There are also connected components such as a server, where pricing and transaction information are stored or a CRM, where customer information are stored. The software part is a key feature of an ePos system, and will include an ePos software, an inventory software and connectors to financial reporting software and CRM.
Choosing the right service provider: the blurring line between payment gateways and merchant account providers
Services providers are necessary to enable credit card payment processing. A payment gateway will act as an intermediary between the shop, customer, credit card issuer and banking institutions of the shop owner and the customer. A merchant account will be provided by the shop’s so-called “issuing bank” as an intermediary account to receive the funds, before they can be finally transferred to the shop’s business account.
Traditionally, issuing banks will market the merchant account as a hardware and service package, with the credit card terminal, access to the payment gateway and merchant account per se. However, some payment gateways may now offer the full package as well, including merchant account and card payment machines.