We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Credit Card Terminals?

Mary McMahon
Updated May 17, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Credit card terminals are machines which are designed to process credit cards in a retail setting. It is necessary to use a credit card terminal when running credit cards, as the terminal communicates with the card issuer to ensure that the card is valid and that there is not a block or hold on the credit card. Numerous styles and designs with an assortment of options are available from several manufacturers, many of whom team with banking services to provide credit card terminals to businesses when they open an account to process credit cards.

The credit card terminal is used at the point of sale. When a customer wants to use a credit card to pay for goods or services, the card is swiped through a terminal which reads the information on the magnetic strip embedded in the card. The credit card terminal communicates with a central computer, which confirms that the card is valid and that the customer has enough credit for the transaction. Within seconds, an approval bounces back to the credit card machine, which confirms that the transaction is valid and issues a receipt. If there is a problem, an error code is displayed, indicating that the credit card is not valid, could not be read by the machine, or it might be stolen.

There are two basic styles for credit card terminals. Some are designed to be operated entirely behind the counter by the clerk. The customer does not see or interact with the terminal, which may be integrated into a point of sale system, instantly transmitting data to the computer about the transaction. In other cases, credit card terminals are meant to be used entirely by the customer, as is often the case at supermarket check stands. When credit card terminals are enabled with debit card abilities, they are set up for customer use, so that the customer can enter his or her personal identification number.

Some small businesses without a point of sale system use standalone credit card terminals. At the end of the day, the credit card terminal prints a final report, which must be reconciled with the rest of the financial reports for the business. In other instances, the credit card terminal is integrated into the point of sale system, which creates one central report at the end of the day with all of the financial data.

In both cases, when financial data is transmitted through credit card terminals, money is transferred into the account of the business from the card holder's account. At the end of the month, the business receives a statement from the credit card process, requesting a percentage of the total credit card income. Typically there is also a per-card processing charge.

For consumers who wonder about credit card minimums or businesses which refuse to accept credit cards, the Byzantine payment system is usually to blame. Most business owners would like to be able to accept credit cards, since they are in popular demand. However, the cost of processing may be more than the business can bear, especially in the case of a small business which cannot negotiate better contract terms.

Many credit card terminals come with an embedded printer, while others are designed to output to another receipt printer. In either case, two copies of the receipt are printed so that the customer can sign one for the store's records, and the customer can take one home. Most businesses keep signed records for up to one year before disposing of them securely, typically shredding them to eliminate personal information.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a WiseGeek researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.