What Does Point of Sale Terminal Mean?
A point of sale terminal (POS terminal) is an electronic device used to process card payments at retail locations. A POS terminal generally does the following:
- Reads the information off a customer’s credit or debit card
- Checks whether the funds in a customer’s bank account are sufficient
- Transfers the funds from the customer’s account to the seller’s account (or at least, accounts for the transfer with the credit card network)
- Records the transaction and prints a receipt
Techopedia Explains Point of Sale Terminal
Point of sale terminals are a combination of software and hardware that allows retail locations to accept card payments without updating their cash registers to read cards directly. The costs of installing POS terminals vary with the size of the business and the terms from the supplier. Small merchants may have to pay rent for the terminal, as well as pay an additional per-transaction fee.
The trend is away from the traditional use of just magnetic stripe reader as more options open up for mobile payments.