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Card terminal basics

Often called a Point of Sale (POS) terminal, a credit card terminal is the means by which merchants take card payments from customers. Today, pretty much all trading outlets are expected to accept credit card payments, so a credit card machine is an essential piece of modern business equipment.

card terminal

Which is better: fixed or mobile credit card terminal?

Obviously the type of credit card terminal you choose will be governed by how your business operates. And the real decision will be to choose between fixed and mobile terminals.

  • Fixed  credit card terminals are perfect for shops and fixed sales counters, where payment is always taken at a static till point. This is the standard countertop system that has been tried and tested over many years. Because the entire system is in one place a reliable connection is guaranteed and costs are kept low.
  • Mobile credit card terminals are more fitting for some businesses such as restaurants, cafes, food vans or any set up that takes a service to a customer (plumbers, cleaning companies, take away services etc). This allows payment to be taken wherever the customer is, providing an excellent level of professionalism and customer service. These can either be portable (working within a certain distance to a fixed base unit), or completely wireless terminals. These models are more expensive and the issue of battery life can sometimes be a problem.

Terminal connection choices

Do you need to compare credit card terminals? Payment terminals also vary by how the connection between bank and merchant is made. Again, choosing the right one will come down to your specific point of sale needs, as well as budget:

  • Wireless credit card terminals are the most expensive and work via a cellular network.
  • Bluetooth terminals offer good coverage for mobile card terminals in range of a hub.
  • IP and Ethernet terminals connect using a broadband internet connection via a router, providing fast transaction speeds for portable cerdit card machines.
  • Dial up connection through a dedicated analogue phone line offers a cheap and reliable static service.

Working out the costs

So how much are these electronic till systems going to cost? Well, as with most purchases, the more sophisticated the technology, the higher the price tag. But credit card terminals certainly don’t need to be expensive, and the benefits to business’s customer service and revenue far outweigh the outlay and transaction fees. So what are the different cost components?

  • Purchasing the terminal. Card terminal prices can vary considerably and you will be faced with different purchase costs and rental and service charge packages (sometimes these deals include transaction fees) from the merchant provider. There is usually no one off set up charge.
  • Transaction and merchant fees are incurred on every transaction made, determined by the payment card’s bank and the merchant service provider. Typically this will be between 1-5% (although some credit card processing companies will now charge a flat fee for debit card payments) and is often based on a minimum monthly transaction rate. Working out your projected sales is the first step to finding which merchant account provider will give you the best rates. It is also advisable to check the fees charged by different credit cards. Some can be high, which is why certain cards are not universally accepted amongst small businesses.
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  • response from Thomas Daley
    Nov 13, 2014

    Sounds about right

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