About Wholesale Credit Card Terminals

As a result of the growing reliance on plastic payments, credit card terminals have become an indispensable part of business. Large businesses or organizations can sometimes purchase these essential terminals in bulk directly from the manufacturer. This article will explore some of the functions of credit card terminals, types of terminals, benefits and considerations of their use.

Function

A credit card terminal is a small counter-top device designed to read a customer's credit card, combine credit card data with other transaction information,and process payment or other financial interactions. The information necessary for a transaction is encoded into a customer's card with thousands of tiny magnets in a stripe on the back of the card; these magnets are arranged in either an "up" or "down" orientation, with "up" magnets indicating a value of "one" in binary code. When a customer's card is swiped through the terminal, a magnetic stripe reader interprets the orientation of the magnets to read the necessary information. This data is then combined with transactional information (such as the amount and type of purchase), sent out to the customer's bank via the credit card network, and either approved or declined according to the bank's response. If the transaction is declined, the transaction is terminated and the customer is asked for alternative payment. If the transaction is approved, the charge is processed and the transaction is complete.

Types

While most credit card terminals function in a similar manner, there are various types of terminals tailored to different operational environments. Some professionals may find the most benefit in a wireless terminal that operates across commercial cellular networks. Construction personnel or accident-prone persons may prefer a rugged, rubberized terminal, while businesses with a lack of counter space might maximize their desk real estate with an all-in-one terminal and printer combination.

Availability

Credit card terminals are generally available through the banks through which credit card payments are processed, or from retail dealers who purchase directly from the terminal manufacturers. Because credit card terminals are intended to be distributed to banking customers, wholesale purchasing requires a considerable hardware investment. Some manufacturers, such as Hypercom, require only minimal purchases of a dozen or more terminals before discount pricing is applied. Other manufacturers, like Verifone, may not apply wholesale pricing unless hundreds of terminals are ordered in one batch.

Benefits

The benefits of credit card terminals include increased sales in a retail environment, additional payment options for private and commercial buyers, and automated payment transaction reporting. Buying terminals wholesale extends these benefits by reducing the cost of credit card terminals by as much as hundreds of dollars.

Considerations

In order to use a credit card terminal, a merchant must subscribe to a credit card merchant account through an authorized payment processor, usually a bank or large financial institution. Merchant accounts may be easily obtained, but can quickly accumulate significant expenses. Merchant accounts targeted toward small businesses may cost as little as $100 per month plus a small percentage of each transaction, while merchant accounts for "high-risk" industries (such as pornographers or strip clubs) may run into several hundred or even $1,000 dollars per month. These recurring costs are accrued in addition to the initial purchase price of the credit card terminal, though they are often offset by the increase in profits realized when a merchant begins accepting credit cards.