Point of Sale Terminal

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:

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  • 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.

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Margaret Rouse

Margaret Rouse is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical, business audience. Over the past twenty years her explanations have appeared on TechTarget websites and she's been cited as an authority in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine and Discovery Magazine.Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages. If you have a suggestion for a new definition or how to improve a technical explanation, please email Margaret or contact her…