Credit Card Machines and Connectivity
In my last blog, I discussed how different terminals were capable of performing different functions, or processing different types of transactions. This time, I will be discussing another factor which separates terminals apart from each other: connectivity. During a transaction, the credit card terminal will connect to the processor and then within seconds, a result response will come back to the terminal. Though this is a simplified description of the process, it should make clear that the terminal must be connected to some sort of telecommunications network in order to work at all. There are many different types of terminals out there, but they can all be separated into three categories based on how they connect to your Merchant Account processor.
Dial-up, phone line based terminals: This is your basic terminal which you’ll find in a majority of small to medium sized businesses. If you do some research, you’ll find that these are overall the least costly machines and the ones that have been around the longest. In order to use this type of equipment, you’re business will need a dedicated, analog phone line. By analog, I mean a regular landline, not digital or Voice Over IP.. By dedicated, I mean that it shouldn’t be a phone line which is part of a greater office phone system, such as a PBX or IP-PBX System. Though your office can use one of these, you should speak to your phone people about getting a dedicated phone line which is separate from your system. Many times, a merchant will already have a fax machine which runs off of a dedicated line. One good thing to note is that almost all dial-up credit card terminals come with an extra phone port so that they can share the phone line with a fax machine or a single phone. The one problem here is that you wouldn’t be able to use your credit card machine and your phone or fax machine at the same time. The next type of terminal connectivity eliminates this problem
IP-based terminals: These terminals work off of your broadband internet connection, and they are great for merchants who use Vonage or other Voice Over IP solutions. Basically, you’d attach your terminal to a Cable Modem, DSL Modem, or into your IP Router in order for the terminal to process transactions. Two great advantages to IP terminals is that they process transactions faster and that they allow you to process transactions and leave phone lines open, allowing you to conduct business without having to wait to free up a line or receive phone calls without worrying about disrupting your credit card terminal. There are also two disadvantages: Firstly, these terminals are usually more expensive than dial-up terminals. Secondly, if you’re experiencing problems with your IP-terminal and need to perform a download to correct programming problems, you may need an analog phone line. Though your terminal will work over IP for authing credit cards, there’s a great chance your processor won’t have the ability to have your terminal pick up your merchant information over IP. It’s been my experience that many merchants who use the internet or VoIP for their phone service won’t have a backup analog phone lines for situations like this. I’d advise you to invest in a phone line for this very reason. It can prevent downtime your business would experience from your Internet Connection or VoIP connection being down.
Wireless terminals: No in-depth explanation necessary. Just like a cell phone, these credit card terminals access a cellular network such as GPRS or CDMA to send info to the credit card processor. Although these are usually the most expensive of the three connectivity types, they are definitely worth it for merchants who process a volume of credit card transactions at trade show sales events or in on-site situations like a plumber or carpenter who comes to your house to make improvements. With this terminal, you will have the piece of mind knowing whether or not a customer’s card will go through at the actual point of sale instead of writing down their information and bringing it back to your office to be keyed in. Not only will it give you piece of mind, but swiped credit card accounts generally get lower rates than those of a MOTO or Keyed Face to Face merchant account would so it may end up saving you money in the long run.
If you are interested in finding out more about which terminal you should use with your existing telephony setup or about how you could benefit from a wireless terminal, call up Merchant Warehouse and let one of our account representatives help you figure out what type of terminal would work best for you. We will definitely have the solution to your credit card terminal needs.
Joseph Fitzgibbons - Senior Support Specialist
Credit Card Machines and Functionality
Not every terminal is built the same. Different terminals have different features and perform different sets of functions. The same goes for merchants; not every merchant is the same and not all require the same functions from their credit card terminals. If you are looking to purchase the POS equipment that best fits your business, you will first need to know how you’ll be conducting business. In addition, you’ll need to know which kinds of payments you’re looking to accept. Determining what you actually need, instead of having someone telling you what you should buy, can keep you from spending unnecessarily.
First, how will you be conducting business? Are you generally going to see the customers or do you do business via the Internet or telephone? If business is done face to face and payments are accepted directly at the point-of-sale, you’ll probably want to purchase a credit card machine. However, MOTO or Internet merchants may want to consider an Internet Gateway, which integrate with a website’s shopping cart, or with a Virtual Terminal such as MerchantWare. One advantage to using an Internet Gateway, Virtual terminal, or both, is that these can be used on a computer with a broadband internet connection. If you already have this in place, all you have to buy is the software or a license. Not having to invest in new hardware will save you both money and work-space.
Secondly, for regular Retail merchants, do you have customer demand for more secure, PIN-based transactions? If so, you might want to get a POS terminal with an internal PIN-pad (no additional hardware to purchase, besides the terminal itself), or one that is compatible with an external PIN-pad. If you have a compatible terminal, I would recommend that you get an external PIN pad. With the external option, the PIN-pad is usually already facing the customer so there wouldn’t be a need for you to hand over the entire credit card terminal for the customer to use. This also means that your credit card terminal is more secure and there is less of a chance of the terminal falling into the wrong hands, literally. Using a customer-facing, external PIN pad should also cut down on transaction time.
Credit and Debit transactions aren’t the only electronic payments you can accept as a merchant. Gift Cards could be a great way to strengthen customer loyalty, beef up your customer retention, and broaden your customer base. If you are considering taking these cards, you will need to either make sure that your existing POS solution can work with your Gift Card service provider, or purchase a new solution which will.
However, like I first mentioned, not all terminals are the same and different merchants will require different functions out of their terminals. If you want to learn more about how to accept Gift Cards, Debit, or even simply credit card transactions and want to know what POS solution will best suit your needs, give a call to Merchant Warehouse and allow one of our friendly and knowledgeable Account Representatives to assist you. They can help you figure out what kind of merchant account you will need and what POS Solution will best fit your business. Check back for my next blog which will discuss POS Solution connectivity.
Joseph Fitzgibbons - Senior Support Specialist