Today’s consumers are constantly connected, more discerning and eager to save time. They expect absolute efficiency from merchants at every stage of their journey and the flexibility to purchase anytime, anywhere, from any device. Most of you are familiar with point of sale (POS) systems, even if you don’t realize it. They’re the software and hardware that a retail business needs to run their business. From ordering and managing inventory to processing transactions, managing customers and staff, the point of sale is the central hub that helps retailers grow their business. POS systems have enabled anyone, from business-savvy entrepreneurs to artisans who want to turn their passion into their profession, to open a retail store and grow. POS stands for “point of sale,” which is just a succinct way of referring to the place where a retail transaction is processed and completed—i.e., the customer selects an item or service, the merchant calculates the amount owed and offers the customer methods of payment, the customer pays, and the merchant accepts and processes that payment. (And you can see why the phrase “point of sale” is a much easier way to describe this scenario.) So, the POS machine refers to the equipment that actually does the job of accepting and processing your customer’s payment.
What Does a POS Terminal Do?
At its heart, a POS terminal is your business’s payment processing hardware, embedded with software that accepts debit and credit cards. As you know, though, there’s more than one way to accept a customer’s credit or debit card, all of which the most sophisticated POS terminals are capable of processing. Ideally, then, whichever POS system (and its accompanying POS terminal) you choose for your business can accept all of the following credit card types:
Due to their increased security measures, chip cards embedded with EMV technology are growing in popularity in the U.S. And in fact, under EMV compliance law, all business owners must have POS terminals (or upgrade their existing POS systems) to accept these “dip” cards.
Even though credit card companies are phasing out credit cards equipped solely with magnetic strips, magstripe cards are still widely used. Luckily, it’s easy to find chip and swipe card readers on the market.
More and more consumers are using credit cards with contactless payment technology (also known as NFC, or near field communication), such as Apple Pay and Google Pay. Not only are these cards the fastest way to pay, but revenue garnered from contactless payments is projected to grow.
If you have an online store, or an entirely online business, it’s crucial that you choose a POS terminal that accepts online payments. Technically, however, accepting online payments doesn’t necessitate a countertop POS terminal; rather, you’ll need a merchant account and a secure payment gateway.