A payment terminal, also known as a Point of Sale (POS) terminal, credit card terminal, EFTPOS terminal (or by the older term as PDQ terminal which stands for “Process Data Quickly” or in common jargon as “Pretty Damn Quick”, is a device which interfaces with payment cards to make electronic funds transfers. The terminal typically consists of a secure keypad (called a PINpad) for entering PIN, a screen, a means of capturing information from payments cards and a network connection to access the payment network for authorization.
A payment terminal allows a merchant to capture required credit and debit card information and to transmit this data to the merchant services provider or bank for authorization and finally, to transfer funds to the merchant. The terminal allows the merchant or their client to swipe, insert or hold a card near the device to capture the information. They are often connected to point of sale systems so that payment amounts and confirmation of payment can be transferred automatically to the merchants retail management system. Terminals can also be used in stand alone mode, where the merchant keys the amount into the terminal before the customer present their card and personal identification number (PIN).
The majority of card terminals today transmit data over cellular network connections and Wi-Fi. Legacy terminals communicate over standard telephone line or Ethernet connections. Some also have the ability to cache transactional data to be transmitted to the gateway processor when a connection becomes available; the major drawback to this is that immediate authorization is not available at the time the card was processed, which can subsequently result in failed payments. Wireless terminals transmit card data using Bluetooth, Wi-Fi, cellular,]or even satellite networks in remote areas and onboard airplanes.
Prior to the development of payment terminals merchants would capture card information manually (using what are called “ZipZap” machines). The development of payment terminals was led by the advantage of efficiency by decreased transaction processing times and immediate authorisation of payments. In terms of security, terminals provide end to end card data encryption and auditing functions. Nevertheless, there have been some cases of POS pin pad malware. There have also been incidence of skimming at card terminals and this led to the move away from using the magnetic strip to capture information using EMV standards
Prior to the development of payment terminals, merchants would use Manual Imprinters (also known as ZipZap machines) to capture the information from the embossed information on a credit card onto a paper slips with carbon paper copies. These paper slips had to be taken to the bank for processing. This was a cumbersome and time consuming process.
Point of sale terminals emerged in 1979, when Visa introduced a bulky electronic data capturing terminal which was the first payment terminal. In the same year magnetic stripes were added to credit cards for the first time. This allowed card information to be captured electronically and led to the development of payment terminals.
One of the initial companies to produce devoted repayment terminals was Verifone. It began in 1981 in Hawaii as a little electronic business. In 1983 they introduced the ZON incurable series which would come to be the standard for modern settlement terminals.
Hungarian born George Wallner in Sydney, Australia founded rival Hypercom in 1978 and in 1982 started producing committed settlement terminals. It took place to control the Oceania area. Thee firm signed a handle American Express to provide its terminals to them in the United States. To settle the deal, Hypercom moved its head office from Australia to Arizona in the United States. It after that dealt with head to head competition with VeriFone on its residence market.
Over a decade later on in 1994 Lipman Electronic Engineering, Ltd. was established in Israel. Lipman made the Nurit line of processing terminals. Because of Verifone’s currently strong area in the repayment handling industry when Lipman was established, Lipman targeted an untapped niche in the handling industry. While, Lipman holds about a 10% share in wired charge card terminals, they are the undisputed leader with greater than 95% share in wireless processing terminals in the late 1990s.
Verifone would certainly later got both of these major rivals, obtaining Lipman in 2006 and also the settlement part of the Hypercom service including its brand in 2011.
In 1980 Jean-Jacques Poutrel and also Michel Malhouitre in 1980 recognized Ingenico in France and also established their initial settlement terminal in 1984. Its Barcelona-based R&D unit would certainly lead the growth of settlement terminals for the next years. Ingenico, with a variety of purchases, would control the European market for repayment terminals for a number of years. They obtained French based Bull and also UK based De La Rue settlement terminal task along with German Epos in 2001.
At first, info was captured from the magnetic strip on the back of the card, by swiping the card through the terminal. In the late 1990s, this began to be changed by smart cards where the chip was installed in the card. This was done for added safety and security as well as required the card to be inserted into the credit card terminal. In the late 1990s and very early 2000s contactless settlement systems were introduced and the payment terminals were upgraded to consist of the capacity to read this these cards using near field interaction (NFC) technology.
- Key entry (for customer not present mail and telephone order)
- Refunds and adjustments
- Settlement (including automatic)
- Payments using near field communication enabled devices
- Remote initialisation and software update
- Point of sale (POS) integration
- Multi-merchant capabilities
- Pen or PIN authorization by the customer
- Surcharge function
- Secure password operation
- Additional PIN pad attachments
There are 3 main global players who offer both a wide range of payment terminals, sell worldwide, and continue to develop to the latest international payment industry standards. In most countries terminals are provided to merchants via a multitude distributors that support and pre-configure devices to operate with local payment networks or financial institutions.
- PAX Technology