One of the first decisions you’ll need to make when you apply for a merchant account is whether or not you need a credit card terminal (a.k.a. Point of sale or POS terminal), and if you decide you need a terminal, which one to choose?
First, do you need a credit card terminal?
If you process transactions face to face with your customers most of the time, a credit card terminal is a likely option. Because the terminal makes it easy to swipe a card and complete the sale, credit card terminals are often used in “card present” situations where the cardholder (with their credit card) is present at the time of the sale.
Some mail and telephone order businesses also choose to use credit card terminals and key in the credit card information into the terminal.
But there are other options for retail and mail/telephone orders:
- A virtual terminal (such as the Intellivative Merchant Portal) can also fit the bill if you have a computer with an internet connection handy. The advantage of using this is you can have as many checkouts as you have computers, without additional costs for a terminal at each checkout. You can also attach a small card-swipe device to your computer for face-to-face transactions. This option is very handy for small businesses and mail order call centers.
- If you want to integrate your business systems (such as your shipping or inventory system), consider using a payments API (like the Intellivative API), which allows you to create your own custom integrated payment solution.
Online businesses should typically steer away from credit card terminals, and should instead integrate appropriate payment processing software (such as the Intellivative Payments API) into their eCommerce web site.
How much does a credit card terminal cost?
Terminal costs range from $99 to more than $1000, depending on the age of the terminal and the features offered. Some credit card terminals come with an integrated printer; if you get one without a printer, you may need to purchase a printer for receipts as well.
Factors to consider
Do you need to manage multiple merchant accounts?
Do you plan to share your terminal across businesses? If you are sharing a terminal with other co-located businesses who will need to run transactions on their own merchant account, there are some terminals that can hold up to 9 merchant accounts. This might happen in a doctor’s office or hair salon where several independent businesses all work at the same place. If you want to do this, look for a terminal that can hold multiple merchant accounts. (Or think about using a virtual terminal, which would allow each business to log into their own account.)
Do you have a phone line available?
Many credit card terminals dial out through a phone line. Often you can share this line with other devices (such as a fax machine) as long as the line is available when you need to process a transaction. Also, make sure the line does not have call waiting to ensure your transaction processing doesn’t get interrupted. Transaction times on a phone line are typically about 10 seconds.
Do you have high-speed internet?
Many newer credit card terminals connect using an internet connection. If you have high-speed Internet access at your business, you probably want a terminal that connects to the internet so you can save money on an extra phone line and process your transactions faster (around 2-3 seconds per transaction).
No phone or internet?
Wireless credit card terminals do not need a phone line. They communicate wirelessly, like your cell phone. With a wireless terminal, you can process your transactions from anywhere as long as you’re within the network coverage area. You might choose a wireless terminal if you have a regular need to process payments in out-of-the-ordinary locations, such as a parking lot (in the case of a car rental business) or outdoor festival.
If your need to process transactions only happens occasionally when (or where) a phone or Internet connection isn’t available, you might want a terminal with store and forward capabilities. With store and forward, you can enter the information into the terminal and it will store the information until you do have access to a phone line or Internet connection. The disadvantage of this is you don’t know right away whether the transaction was approved or declined, so if you’re selling goods, it can put your business at risk.
Do you want to accept debit cards?
If you want to accept debit cards and get the lowest transaction fees, you should consider getting a PIN pad for customers to enter their personal identification number (PIN). Without a PIN pad, you’ll still be able to accept debit cards, but you’ll need to run it as a credit card transaction, which tends to cost a little more in transaction fees.
Should you lease or buy a credit card terminal?
Typically it’s better to buy a terminal than lease one, as leasing will cost you more money in the long run. We recommeng you research terminal prices and don’t pay more for a terminal than what it’s worth. Also, don’t let anyone push you into a leasing agreement that you don’t want.
What kinds of terminals does ApprovedPayments offer?
We offer a wide selection of terminals, with the most popular being from Verifone, Hypercom, and Nurit. We’d be happy to help you pick the right terminal for your business–apply today for a no-obligation quote.
