Step Four: Choosing a Credit
Card Swipe Terminal
OK, we have covered every aspect of preparing your retail
establishment, what to look for in finding a merchant account, and lastly
the information you'll need to obtain your retail merchant account. Let's
switch gears a bit and look into choosing a POS terminal for your
business. Do you need a full-featured all-in-one solution? Perhaps just
a basic swipe terminal solution is all that's required. This section will
aid you in the decision-making process.
Determining the Features Your Swipe Terminal Needs
Before you begin looking at swipe terminals, you need to
come to a conclusion on what types of payment you will want to accept.
POS terminals have the ability to accept much more than just
traditional credit cards. Here are some of the other types of payment that
can be processed, in addition to credit cards:
Most all POS terminals have the option of allowing you to
accept debit cards like Star, Interlink, Pulse, Maestro, and others. Some
terminals have an internal PIN pad which your customers use to enter their
PINs. Others have a port to connect a
hand-held PIN pad. The biggest benefit to accepting debit cards is the
fact that only a transaction fee is charged, almost never a discount rate.
Choosing whether to have a POS swipe terminal with an internal or external
PIN pad depends on some factors like:
1. Do you mind customers handling your terminal to enter
their PIN? Or would you be more comfortable with them using a hand-held
PIN pad instead?
2. There is less clutter with an internal PIN pad since
it is an all-in-one unit
External PIN pads usually can be purchased for between
$100 and $200.
Simply put, ECC will allow you to process paper checks
electronically. In order to do this you'd need to have a check
imager/reader. These run a few hundred dollars. What they do is scan the
MICR line at the bottom of the check and take an image of the entire check
to store for your records. You might see this at some bank ATM
machines, where they scan your check and print a copy of it out on your
receipt.
Here's some advantages to using Electronic Check
Conversion:
1. Money is deposited into your account faster
2. Reduces paper check handling, like eliminating the
need to deposit checks at your bank
3. Eliminates risk of losing or having paper checks stolen
4. Returned checks are reported sooner so you can
collect more effectively
Accepting loyalty cards is great if you plan to be very
promotional with your goods. This solution is good for primary cash
environments like grocery, movie rental, hardware stores, etc.
Accepting loyalty cards will help increase business. You've seen
these at grocery stores where they scan a little card that gives you
"bonus points" for shopping. They also allow you to take advantage
of current promotions. Many terminals can be programmed to accept loyalty cards.
Smart cards are still very new. In addition to paying for
goods, like a credit card, smart cards have a special chip in them that
allows you to store specific information. College campuses have begun
using these to keep information on students, in addition to allowing them
to "charge up" their cards with money.
Smart cards will probably take over the traditional credit
card market within the next 5 to 10 years. It would be in your best
interest to invest in a terminal that can be upgraded for smart cards, either
with an internal smart card
processor or the addition of a hand-held
smart card reader/writer. These external units cost about the same as
external PIN pads.
These are commonly referred to as debit cards, however
they are actually check/ATM cards. You can tell their difference from
typical debit cards because they will have a Visa or MasterCard logo on
them. These cards can either be processed the same as credit cards or you
can accept them as debit cards where the customer enters in their PIN. It
would be beneficial to you if you accept them like you would a PIN-based
debit card, then you'd only incur a small transaction fee and no discount
rate. This will save you money in processing costs.
If you wish to cater to food stamp and cash welfare
benefit customers, then accepting EBT cards is for you. EBT isn't just
good for food purchases, but can include many non-food items. EBT works
just like debit card processing. You will either need a POS terminal that
has an internal PIN pad or purchase an external PIN pad. EBT customers
need to be able to enter in their PIN during checkout.
Go To Next Page: Integrated vs. non-integrated;
refurbished vs. new; purchasing vs. leasing
Retail Merchant
Accounts & POS Swipe Terminal Guide
(page 4 of 6)
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