Credit Card Machine

Getting the right credit card terminal for you business is similar to getting the correct merchant account. It can make all the difference between a good experience and a frustrating battle. It’s not just about, “How to get a credit card machine.” Just like other pieces of technology, reliability and user friendliness play a role – one you shouldn’t overlook when shopping for the right solution.

The Basics of Credit Card Machines

A credit card terminal is basically an input device. They will have a magnetic strip reader, a keypad, and may have a screen to capture an electronic signature. That’s the essentials of the first function – data capture. The second step is sending that data over a network to record and verify the transaction. These same two steps happen for credit cards, gift cards, or debit cards.

A business credit card machine can either transmit data immediately or hold the information until the end of the business day. When the data is recorded, but only sent later for resolution, you don’t have immediate verification of payment. This is less popular because the customer has left by then, making it difficult to solve problems or errors that arise.

How data is entered changes the type of transaction. Processing credit cards is generally of two types – “card present” and “card not present.” If you take phone orders, you may be punching in numbers on a keypad instead of swiping the card; neither the customer nor the card is actually in front of you. These two types have different levels of risk, and the fee is usually more for “card not present sales.”

With these two basic functions – gathering data and transmitting it – there are many processing solutions out there. For instance, merchant credit card processing can be tied directly into a cash register (POS terminal) or be a separate step. There may not even be a direct connection between the machine and a phone line or the Internet. A wireless credit card machine can operate anywhere a radio signal can reach – a good solution where sales personnel are out in the field or you don’t want them tied to a cash register. However, no matter how the physical machine appears or how it transmits data, the two functions remain the same: record the card information (and sale data) and send that along the chain.

Which Merchant Credit Card Machine Should I Get?

The type you get depends largely on how you take credit cards. If you only do internet processing through a website, you may not need a machine at all. Merchant processing services in this case are through a gateway and your virtual storefront. Either the customer’s computer or your own computer becomes the terminal in this case.

For others, you should start with the provider of your retail merchant account. You will often be offered a new credit card machine as part of getting your merchant processing through them. Ask for rates with and without a terminal so you have a number to use when shopping around. The reason is that you may want to get a different style or a refurbished credit card machine instead of a completely new credit card terminal. You should verify with your processing company that the terminal you have in mind to purchase is compatible before you buy.

Credit card machine companies: Buying a name brand ensures you have compatibility, reliability and a guarantee. The standard Verifone credit card machine is one of the oldest and most reasonably priced. They also offer guarantees on checks through their network. Other popular choices are the Hypercom credit card machine (which makes the T7plus credit card machine), and the Nurit credit card machine (made by Verifone).

The difference between machines comes in the contactless readers (the swipe doesn’t wear off the magnetic strip), electronic signature capability, keypad style, and functions (pre-authorization, refunds, others). Some allow customer number input as a specialized function (useful for loyalty programs). Machines that read and process checks electronically are also available.

Other options are a mobile credit card machine – this can be a standalone device or an attachment to a smart phone that scans in cards and sends the information with an Internet connection.

Just in case anyone is wondering, the type of machine you choose has no bearing on they type of cards you can accept.  You can accept any credit card you want from Master Card processing, Visa, AMEX to all the smaller players regardless of what machine you pick.

New or Refurbished?

Because a new terminal can run a hundred dollars or more, refurbished units have entered the market as a lower cost substitute. The downside is the lack of manufacturer’s warranty and limited service. The upside is lower prices. If you are buying from a reliable company and don’t need the latest style of terminal, this is a good option.

Buy or Lease?

Leasing is usually not the best choice for small businesses. Unless you are careful to avoid a contractual obligation, you will generally pay for the cost of the terminal in a year or two anyhow. The processing company will replace defective equipment, and that’s a plus, but when you buy, you can expense out the terminal and won’t be tied to a contract. It may be better to get a lower overall rate for running credit cards and buy your own machine instead of taking a “free” terminal with a merchant account. Ask for a discount if you already own a terminal or intend to buy one yourself.

Bottom Line

With all of the solutions available, you should be able to match your credit card terminal to the way you want to do business. And there is no reason to settle on one solution – if you have both a retail location and outside sales, you can get both a fixed and mobile unit. The point is to consider your needs rather than take the first thing offered to you.