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What Is A Credit Card Terminal?

Credit card terminals are machines used by merchants to process credit card payments. The purpose of the terminal is to scan the card, authenticate it and transmit the data. These machines protect the merchant, because if the customer attempts to use a card that is expired, stolen or damaged, the payment will be denied and the merchant will avoid giving away their products for an invalid card. Most stores these days have at least one credit card terminal, and larger stores can have dozens of them.

How Card Terminals Work

Most terminals will come with a keypad and a slot where the customer can swipe their card. When the card is swiped, the terminal will read the information on the card’s magnetic strip. Many terminals also require a four digit code to be keyed in, as an additional security measure. The information from the card’s magnetic strip will be sent for verification, which will return either an “approved” or “declined” message to the merchant. If the card is approved, the merchant can provide their goods or services to the customer, but if the card is declined, they can block the sale.

Most credit card terminals are attached to phone networks, and they function in the same manner as a modem. This is necessary for them to transmit data for verification. However, some credit card terminals are wireless, and will use either cell phone networks or Wi-Fi to send data for verification.

Card Terminal Variations

Some credit card terminals work differently from others, and require no input from the merchant. These card terminals automatically transmit data, and will facilitate communication between the verification center and the customer. These newer card terminals are typically used in self-checkout lines. Other credit card terminals don’t perform immediate verification, and will merely store the information which is scanned when the card is swiped. These terminals will print out receipts if requested, and can transmit data in a single batch.

These types of credit card terminals will typically be found in outdoor events, where few phone lines exist and the merchant has no access to wireless terminals. Finally, some card terminals are completely web based, and will be used by customers who are shopping online. There is no need to physically swipe the card, but customers will need to key in both their credit card and CCV number. Once this is done, verification is completed immediately.