Payment terminal: Difference between revisions
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{{Short description|Device for electronic fund transfers}} |
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{{more citations needed|date=April 2016}} |
{{more citations needed|date=April 2016}} |
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{{use dmy dates|date=August 2023}} |
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[[File:Credit_card_terminal_in_Laos.jpg|thumb|PAX Technology S90 credit card terminal with a [[Visa Inc.|Visa]] card inserted.]] |
[[File:Credit_card_terminal_in_Laos.jpg|thumb|PAX Technology S90 credit card terminal with a [[Visa Inc.|Visa]] card inserted.]] |
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A '''payment terminal''', also known as a '''point of sale (POS) terminal''', '''credit card |
A '''payment terminal''', also known as a '''point of sale (POS) terminal''', '''credit card machine''', '''card reader''', '''PIN pad''', '''[[EFTPOS]] terminal''' (or by the older term as '''PDQ terminal''' which stands for "Process Data Quickly"<ref>{{Cite web|url=https://ask.barclaycard.co.uk/business/allfaqs/1_accepting_payments/pdq_terminal|title=Ask Barclaycard a question|last=Transversal|first=James Leslie at|website=ask.barclaycard.co.uk|language=en|access-date=2017-09-28|archive-date=2019-03-31|archive-url=https://web.archive.org/web/20190331131253/https://ask.barclaycard.co.uk/business/allfaqs/1_accepting_payments/pdq_terminal|url-status=dead}}</ref>), is a device which interfaces with [[payment card]]s to make [[electronic funds transfer]]s. The terminal typically consists of a secure keypad (called a [[PINpad]]) for entering [[Personal identification number|PIN]], a screen, a means of capturing information from payments cards and a network connection to access the [[payment network]] for authorization. |
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A payment terminal allows a [[merchant]] to capture required [[credit card|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 |
A payment terminal allows a [[merchant]] to capture required [[credit card|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 merchant's 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). |
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The majority of card terminals today transmit data over [[cellular network]] connections and [[Wi-Fi]]. Legacy terminals communicate over [[plain old telephone service|standard telephone line]] or Ethernet connections. Some also have the ability to [[cache memory|cache]] transactional data to be transmitted to the [[ |
The majority of card terminals today transmit data over [[cellular network]] connections and [[Wi-Fi]]. Legacy terminals communicate over [[plain old telephone service|standard telephone line]] or Ethernet connections. Some also have the ability to [[cache memory|cache]] transactional data to be transmitted to the [[payment 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]], [[mobile broadband|cellular]],<ref>{{Cite web| url=https://ingenico.us/expertise/pay-at-the-table|title=Ingenico Group – Expertise – Pay-at-the-Table|website=ingenico.us|language=en|access-date=2017-09-13}}</ref>{{promotional source|date=December 2018}} or even [[satellite network]]s in remote areas and onboard airplanes. |
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Prior to the development of payment terminals, merchants would capture card information manually using [[Credit card imprinter|ZipZap machines]].{{Citation needed|date=January 2019}} The development of payment terminals was led by the advantage of efficiency by decreased transaction processing times and immediate authorisation<ref name=":0" /> of payments. In terms of security, terminals provide end to end card data [[Point to Point Encryption|encryption]] and auditing functions. Nevertheless, there have been some cases of POS pin pad malware.<ref>{{cite web |title=A First Look at the Target Intrusion, Malware – Krebs on Security |url=https://krebsonsecurity.com/2014/01/a-first-look-at-the-target-intrusion-malware/comment-page-2/ |access-date=19 August 2021}}</ref> There have also been incidence of [[Skimming (credit card fraud)|skimming]] at card terminals and this led to the move away from using the magnetic strip to |
Prior to the development of payment terminals, merchants would capture card information manually using [[Credit card imprinter|ZipZap machines]].{{Citation needed|date=January 2019}} The development of payment terminals was led by the advantage of efficiency by decreased transaction processing times and immediate authorisation<ref name=":0" /> of payments. In terms of security, terminals provide end to end card data [[Point to Point Encryption|encryption]] and auditing functions. Nevertheless, there have been some cases of POS pin pad malware.<ref>{{cite web |title=A First Look at the Target Intrusion, Malware – Krebs on Security |date=16 January 2014 |url=https://krebsonsecurity.com/2014/01/a-first-look-at-the-target-intrusion-malware/comment-page-2/ |access-date=19 August 2021}}</ref> There have also been incidence of [[Skimming (credit card fraud)|skimming]] at card terminals and this led to the move away from using the magnetic strip to instead capturing information using [[EMV]] standards.<ref name=":0">{{Cite web|url=https://krebsonsecurity.com/2017/01/atm-shimmers-target-chip-based-cards/|title=ATM 'Shimmers' Target Chip-Based Cards — Krebs on Security|website=krebsonsecurity.com|date=27 January 2017 |language=en-US|access-date=2017-09-13}}</ref> |
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==History== |
==History== |
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[[File:Credit card terminal.jpg|thumb|right|A typical fixed install card terminal from 2006]] |
[[File:Credit card terminal.jpg|thumb|right|A typical fixed install card terminal from 2006]] |
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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 slip with carbon-paper copies. These paper slips had to be taken to the bank for processing. This was a cumbersome and time-consuming process. |
Prior to the development of payment terminals, merchants would use [[Credit card imprinter|manual imprinters]] (also known as ZipZap machines) to capture the information from the embossed information on a credit card onto a paper slip with carbon-paper copies. These paper slips had to be taken to the bank for processing. This was a cumbersome and time-consuming process. |
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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 stripe card|magnetic stripe]]s 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. |
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 stripe card|magnetic stripe]]s 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. |
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Hungarian-born George Wallner in [[Sydney]], [[Australia]], founded rival [[Hypercom]] in 1978 and in 1982 started producing dedicated payment terminals. It went on to dominate the [[Oceania]] region. The company signed a deal with [[American Express]] to provide its terminals to them in the US. To consolidate the deal, [[Hypercom]] moved its head office from Australia to [[Arizona]] in the US. It then faced head-to-head competition with [[VeriFone]] on its home market.<ref>{{cite web |url= http://www.fundinguniverse.com/company-histories/hypercom-corporation-history/ |title=Hypercom Corporation History |publisher=Funding Universe |access-date=December 8, 2015}}</ref>{{promotional source|date=December 2018}} |
Hungarian-born George Wallner in [[Sydney]], [[Australia]], founded rival [[Hypercom]] in 1978 and in 1982 started producing dedicated payment terminals. It went on to dominate the [[Oceania]] region. The company signed a deal with [[American Express]] to provide its terminals to them in the US. To consolidate the deal, [[Hypercom]] moved its head office from Australia to [[Arizona]] in the US. It then faced head-to-head competition with [[VeriFone]] on its home market.<ref>{{cite web |url= http://www.fundinguniverse.com/company-histories/hypercom-corporation-history/ |title=Hypercom Corporation History |publisher=Funding Universe |access-date=December 8, 2015}}</ref>{{promotional source|date=December 2018}} |
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Over a decade later in 1994, [[Lipman Electronic Engineering, Ltd.]] was established in Israel. Lipman manufactured the Nurit line of processing terminals. Because of Verifone's already firm place in the payment processing industry when Lipman was established, Lipman targeted an untapped niche in the processing industry. While, Lipman |
Over a decade later in 1994, [[Lipman Electronic Engineering, Ltd.]] was established in Israel. Lipman manufactured the Nurit line of processing terminals. Because of Verifone's already firm place in the payment processing industry when Lipman was established, Lipman targeted an untapped niche in the processing industry. While, Lipman held about a 10% share in wired credit card terminals, they were the undisputed leader, with more than 95% share in wireless processing terminals in the late 1990s. |
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Verifone would later acquire both of these major rivals, acquiring Lipman in 2006 and the payment part of the Hypercom business including its brand in 2011. |
Verifone would later acquire both of these major rivals, acquiring Lipman in 2006 and the payment part of the Hypercom business including its brand in 2011. |
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In 1980, Jean-Jacques Poutrel and Michel Malhouitre established [[Ingenico]] in France and developed their first payment terminal in 1984. Its Barcelona-based R&D unit would lead the development of payment terminals for the next decade. Ingenico, through a number of acquisitions, would dominate the European market for payment terminals for a number of years. They acquired French based [[Groupe Bull|Bull]] and UK based [[De La Rue]] payment terminal activity as well as German Epos in 2001.<ref>{{cite web |url=https://www.ingenico.com/about-ingenico-group/about-us/our-history |title=Ingenico – Our history |access-date=December 28, 2016}}</ref>{{promotional source|date=December 2018}} |
In 1980, Jean-Jacques Poutrel and Michel Malhouitre established [[Ingenico]] in France and developed their first payment terminal in 1984. Its Barcelona-based R&D unit would lead the development of payment terminals for the next decade. Ingenico, through a number of acquisitions, would dominate the European market for payment terminals for a number of years. They acquired French based [[Groupe Bull|Bull]] and UK based [[De La Rue]] payment terminal activity as well as German Epos in 2001.<ref>{{cite web |url=https://www.ingenico.com/about-ingenico-group/about-us/our-history |title=Ingenico – Our history |access-date=December 28, 2016 |archive-date=24 October 2020 |archive-url=https://web.archive.org/web/20201024174417/https://www.ingenico.com/about-ingenico-group/about-us/our-history |url-status=dead }}</ref>{{promotional source|date=December 2018}} |
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Initially, information was captured from the magnetic strip on the back of the card, by swiping the card through the terminal. In the late 1990s, this started to be replaced by [[smart card]]s where an electronic chip was embedded in the card. This was done for added security and required the card to be inserted into the credit card terminal. In the late 1990s and early 2000s [[contactless payment]] systems were introduced and the payment terminals were updated to include the ability to read these cards using [[near field communication]] (NFC) technology. |
Initially, information was captured from the magnetic strip on the back of the card, by swiping the card through the terminal. In the late 1990s, this started to be replaced by [[smart card]]s where an electronic chip was embedded in the card. This was done for added security and required the card to be inserted into the credit card terminal. In the late 1990s and early 2000s [[contactless payment]] systems were introduced and the payment terminals were updated to include the ability to read these cards using [[near field communication]] (NFC) technology. |
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* Additional [[PIN pad]] attachments |
* Additional [[PIN pad]] attachments |
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Like [[Automated teller machine|automated teller machines]], many payment terminals are also equipped with |
Like [[Automated teller machine|automated teller machines]], many payment terminals are also equipped with raised tactile buttons and an [[Phone connector (audio)|earphone jack]] which allow the blind to audibly finish the payment process.<ref>{{Cite web|url=https://ingenico.us/smart-terminals/telium2/payment-terminals/isc-series/isc-touch-480.html|title=iSC Touch 480 |website=ingenico.us|language=en|access-date=2017-09-13}}</ref>{{promotional source|date=December 2018}}<ref>{{Cite web|url=https://www.wellsfargo.com/help/talking-atm/|title=Talking ATM Overview – Wells Fargo| website=www.wellsfargo.com|language=en|access-date=2017-09-13}}</ref>{{promotional source|date=December 2018}} |
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==Major manufacturers== |
==Major manufacturers== |
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==Alternatives== |
==Alternatives== |
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[[File:POS terminal at a bookstore.jpg|thumb|A touch screen based VeriFone MX 915 series payment terminal.]] |
[[File:POS terminal at a bookstore.jpg|thumb|A touch screen based VeriFone MX 915 series payment terminal.]] |
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A merchant can replace the functionality of dedicated credit card terminal hardware using a [[application software|terminal application]] running on a [[personal computer|PC]] or [[mobile device]], such as a [[smartphone]]. The payment acceptance applications are also called [[ |
A merchant can replace the functionality of dedicated credit card terminal hardware using a [[application software|terminal application]] running on a [[personal computer|PC]] or [[mobile device]], such as a [[smartphone]]. The payment acceptance applications are also called [[tap-on-phone]] or software [[point of sale]]. They usually work with dedicated [[card reader|hardware readers]] that can transfer [[magnetic stripe card|magnetic stripe]] data to the application, while there are also some that also work with [[smart card]]s (using technology such as [[EMV]]), although this is rarely seen on smartphone readers. In case the necessary hardware is unavailable, these applications usually support manual entry of the card number and other data. In addition, more and more devices are beginning to offer built-in [[Radio-frequency identification|RFID]] or [[Near field communication|NFC]] technology to accommodate [[contactless payment|contactless]] or [[mobile payment|mobile device]] payment methods, often without requiring additional external hardware.<ref>{{cite web | url=http://www.cnet.com/news/app-turns-google-nexus-phone-into-payment-tool/ | title=App turns Google Nexus phone into payment tool | publisher=CNET | date=2011-03-24 | access-date=March 24, 2015 | author=Whitney, Lance}}</ref> |
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Some [[payment processor]]s offer ''[[virtual terminal (payment processing)|virtual terminal]]s'' for processing payments without the card being present, for example when taking payments over the phone.<ref>{{Cite web| url=https://www.verifone.com/en/us/devices/multilane/mx-915|title=MX 915| website=Verifone.com |language=en|access-date=2017-09-13}}</ref>{{promotional source|date=December 2018}} |
Some [[payment processor]]s offer ''[[virtual terminal (payment processing)|virtual terminal]]s'' for processing payments without the card being present, for example when taking payments over the phone.<ref>{{Cite web| url=https://www.verifone.com/en/us/devices/multilane/mx-915|title=MX 915| website=Verifone.com |language=en|access-date=2017-09-13}}</ref>{{promotional source|date=December 2018}} |
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* [[Point of sale]] |
* [[Point of sale]] |
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* [[QR code payment]] |
* [[QR code payment]] |
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* [[Live group]] |
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==References== |
==References== |
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Latest revision as of 19:16, 27 August 2024
 | This article needs additional citations for verification. (April 2016) |
A payment terminal, also known as a point of sale (POS) terminal, credit card machine, card reader, PIN pad, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"[1]), 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 merchant's 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 payment 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,[2][promotional source?] or even satellite networks in remote areas and onboard airplanes.
Prior to the development of payment terminals, merchants would capture card information manually using ZipZap machines.[citation needed] The development of payment terminals was led by the advantage of efficiency by decreased transaction processing times and immediate authorisation[3] 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.[4] There have also been incidence of skimming at card terminals and this led to the move away from using the magnetic strip to instead capturing information using EMV standards.[3]
History
[edit]
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 slip 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 first companies to produce dedicated payment terminals was Verifone. It started in 1981 in Hawaii as a small electronic company. In 1983 they introduced the ZON terminal series, which would become the standard for modern payment terminals.
Hungarian-born George Wallner in Sydney, Australia, founded rival Hypercom in 1978 and in 1982 started producing dedicated payment terminals. It went on to dominate the Oceania region. The company signed a deal with American Express to provide its terminals to them in the US. To consolidate the deal, Hypercom moved its head office from Australia to Arizona in the US. It then faced head-to-head competition with VeriFone on its home market.[5][promotional source?]
Over a decade later in 1994, Lipman Electronic Engineering, Ltd. was established in Israel. Lipman manufactured the Nurit line of processing terminals. Because of Verifone's already firm place in the payment processing industry when Lipman was established, Lipman targeted an untapped niche in the processing industry. While, Lipman held about a 10% share in wired credit card terminals, they were the undisputed leader, with more than 95% share in wireless processing terminals in the late 1990s.
Verifone would later acquire both of these major rivals, acquiring Lipman in 2006 and the payment part of the Hypercom business including its brand in 2011.
In 1980, Jean-Jacques Poutrel and Michel Malhouitre established Ingenico in France and developed their first payment terminal in 1984. Its Barcelona-based R&D unit would lead the development of payment terminals for the next decade. Ingenico, through a number of acquisitions, would dominate the European market for payment terminals for a number of years. They acquired French based Bull and UK based De La Rue payment terminal activity as well as German Epos in 2001.[6][promotional source?]
Initially, information was captured from the magnetic strip on the back of the card, by swiping the card through the terminal. In the late 1990s, this started to be replaced by smart cards where an electronic chip was embedded in the card. This was done for added security and required the card to be inserted into the credit card terminal. In the late 1990s and early 2000s contactless payment systems were introduced and the payment terminals were updated to include the ability to read these cards using near field communication (NFC) technology.
Typical features
[edit]
- Key entry (for customer not present mail and telephone order)
- Tips/gratuities
- Refunds and adjustments
- Settlement (including automatic)
- Pre-authorisation
- 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
Like automated teller machines, many payment terminals are also equipped with raised tactile buttons and an earphone jack which allow the blind to audibly finish the payment process.[7][promotional source?][8][promotional source?]
Major manufacturers
[edit]
There are three 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.[9] In most countries terminals are provided to merchants via a multitude of distributors that support and pre-configure devices to operate with local payment networks or financial institutions.
Alternatives
[edit]
A merchant can replace the functionality of dedicated credit card terminal hardware using a terminal application running on a PC or mobile device, such as a smartphone. The payment acceptance applications are also called tap-on-phone or software point of sale. They usually work with dedicated hardware readers that can transfer magnetic stripe data to the application, while there are also some that also work with smart cards (using technology such as EMV), although this is rarely seen on smartphone readers. In case the necessary hardware is unavailable, these applications usually support manual entry of the card number and other data. In addition, more and more devices are beginning to offer built-in RFID or NFC technology to accommodate contactless or mobile device payment methods, often without requiring additional external hardware.[10]
Some payment processors offer virtual terminals for processing payments without the card being present, for example when taking payments over the phone.[11][promotional source?]
Mobile payment systems such as those based on QR code payments bypass the need for payment terminals altogether, relying on smartphones and a printed QR code.
See also
[edit]References
[edit]- ^ Transversal, James Leslie at. "Ask Barclaycard a question". ask.barclaycard.co.uk. Archived from the original on 31 March 2019. Retrieved 28 September 2017.
- ^ "Ingenico Group – Expertise – Pay-at-the-Table". ingenico.us. Retrieved 13 September 2017.
- ^ a b "ATM 'Shimmers' Target Chip-Based Cards — Krebs on Security". krebsonsecurity.com. 27 January 2017. Retrieved 13 September 2017.
- ^ "A First Look at the Target Intrusion, Malware – Krebs on Security". 16 January 2014. Retrieved 19 August 2021.
- ^ "Hypercom Corporation History". Funding Universe. Retrieved 8 December 2015.
- ^ "Ingenico – Our history". Archived from the original on 24 October 2020. Retrieved 28 December 2016.
- ^ "iSC Touch 480". ingenico.us. Retrieved 13 September 2017.
- ^ "Talking ATM Overview – Wells Fargo". www.wellsfargo.com. Retrieved 13 September 2017.
- ^ "How the Top 3 Card Machine Manufacturers are Redefining the Payment Industry". ExpertSure. Retrieved 29 December 2017.
- ^ Whitney, Lance (24 March 2011). "App turns Google Nexus phone into payment tool". CNET. Retrieved 24 March 2015.
- ^ "MX 915". Verifone.com. Retrieved 13 September 2017.