About Credit Card Machines for Small Business

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About Credit Card Machines for Small Business
About Credit Card Machines for Small Business (Image: CC by Nick Gray on Flickr.com)

Credit card machines for small businesses have revolutionized the way that merchants take payment for their goods and services. With the newest technology, it is easier than ever for a business owner to make use of these machines to enhance the business. Most machines are provided to the owner by the company that processes the payment. These companies process payments in exchange for a small portion of the sale, usually only a few percentage points.

Function

Credit card machines make it possible for retail businesses to accept credit cards in exchange for goods and services. With the advent of credit cards, customers are allowed to extended the payment of purchased goods or services over of a period of time instead of paying full price up front. As a result, there became a need to make this process function in an efficient manner. Credit card machines process the information presented on a card and transmit the data over a secure phone line using a specialized modem. The processing service provider indicates whether or not the merchant should accept the card as payment. If the card is accepted as payment, the payment is then processed by the processing service, charging the amount of the purchase to the card by contacting the issuing authority.

History

A furniture merchant by the name of Christopher Thompson is credited with promoting the very first form of credit back in 1730. He offered buyers the chance to buy his furniture by paying it off in weekly increments. Western Union introduced the world's first actual credit cards in 1914. They gave them the label of being "metal cards". It wasn't until another ten years that these "metal money cards" start to go into use, when a gasoline company issued them to their employees. Soon after the cards were made available to the public by way of airlines, railroads and phone companies, which came on board issuing their own versions of the metal cards. It wasn't until 1961 before these metal credit cards were replaced by plastic. One of the first of which was the Diners' Club Card.

Significance

With the rise of credit cards came the need for the credit card machine for small businesses. Today, small business can allow customers to use their credit cards at their place of business by contracting with any number of credit card processing facilities. Many facilities have their own type of credit card terminal which they provide to the merchant either at cost or in exchange for a long-term contract. With crime on the rise over the past few decades, more and more people have turned to carrying credit cards instead of cash. By allowing small merchants to accept credit cards, the credit card machine has allowed many small businesses to stay in business and compete for customers with larger chain stores.

Benefits

A business that utilizes a credit card machine normally can generate more sales and increase their bottom-line profit margin. Depending on the product or service being sold, revenue sales for small business have been shown to increase by as much as 70% once a credit card machine has been installed. The use of electronic exchanging of money is now in greater use than the actual movement of tangible dollars and cents.

Types

Credit card machines for small businesses have evolved from the earliest manual device, which used carbon paper to imprint your card number and information on to a duplicate merchant slip. This bulky piece of equipment was upgraded to an electrical swipe machine that reads the magnetic strip on the back of credit cards. Modern credit card machines have been directly incorporated into cash registers, computer keypads and handheld devices that utilize wireless communication technology.

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