A Point of Sale (POS) system, also known as the swipe machine, permits businesses to receive customer payments and track all their sales. While it might sound fundamental, this setup can work in multiple ways, depending on whether you have a physical store or sell products online.
Earlier, a cash register was known as the POS system. However, keeping up with all the advancements technology has brought, modern POS systems have gone entirely digital. For instance, a POS terminal is a card-reading device that can accept payments for orders placed on a POS system. Have you noticed how some stores print the bill from the same machine on which your card was swiped? This means that the POS terminal is integrated with the Billing Software, which goes a long way in helping out with quicker checkouts.
So, what are how a POS terminal works?
There are three primary ways in which a POS terminal can accept payments made by card:
- You can insert your card into the POS machine. The device processes the card’s microchip, so the card must remain in the device until the transaction is complete.
- You can swipe your card where the magnetic chip is stolen to initiate the transaction.
- MasterCard, Europay, and Visa chip cards can also be tapped on the POS terminal to complete contactless payments using near-field communication (NFC).
How does a POS terminal initiate the payment?
First, the POS swipe machine will connect to the acquirer bank (financial institution that processes debit card & credit card payments for the merchant). The device will then request the customer’s authentication. Next, the issuing bank (financial institution that offers payment cards directly to consumers) is contacted for payment approval via card association (Visa, Mastercard, etc.). After a few standard checks to ensure the transaction is valid, the issuing bank will approve. The POS software will generate a receipt once the POS terminal receives the support.
Swipe machines can range from a simple and sleek card-accepting device to a full-range Android-handled Smart POS system. It is understandable for businesses to have specific needs so that merchants can choose a POS system per their requirements. The most common POS systems are GPRS POS terminal, Android POS, mPOS, ePOS, and a POS system with peripheral services. You can choose one that offers excellent features for your business needs!
Today, the latest POS terminals can offer payment experiences tailored to various businesses’ needs. The advent of these systems has made it possible for organizations to save time and effort, not to mention cut down on errors. Digital payment solutions like POS systems let users easily access all data and insights required for their business’s smooth functioning, which helps boost growth.