A payment terminal, also known as a point of sale terminal, credit card terminal (or a PDQ terminal in the United Kingdom), is a device which interfaces with payment cards to make electronic funds transfers.
There are various types of terminals available to merchants, although most have the same basic purpose and functions. They allow a merchant to insert, swipe, or manually enter the required credit card information, to transmit this data to the merchant service provider for authorization and, finally, to transfer funds to the merchant.
Most newer models not only process credit and debit cards but can also handle gift cards, checks, and so on. The majority of card terminals transmit data over a standard telephone line or an Internet connection (either wired or wireless). Some also have the ability to cache transactional data and transmit the data to the gateway processor when a connection becomes available; immediate authorization is not available at the time the card was processed which can subsequently result in failed payments. Remote wireless terminals can transmit card data using either cellular or satellite networks.
Using a personal computer (PC) or smartphone with appropriate software and reader device, a merchant can replace the functionality of dedicated credit card terminal hardware using a terminal application running on a PC or smartphone. These terminal applications usually also support manual entry of the credit card number. The applications may work with hardware readers that can transfer smart card chip information to the application, however most of the credit card readers that are available for smartphones are only able to read the older magnetic stripes. Some smartphones offer built-in NFC technology and can be used as card terminals for contactless payment cards without requiring additional external hardware.  PCI DSS requirements also need to be considered when using unsecured and unencrypted systems based on generic or open platforms; cardholder data security is integral to mandatory merchant PCI compliance. Several high profile breaches resulting in mass theft of cardholder data have occurred in the past where people have accessed data stored insecurely on bespoke or custom systems operated by merchants.
Merchants have largely moved to using card terminals to directly capture card information instead of manually entering in card details. This provides an efficiency benefit of decreased transaction processing times. Previously, merchants could obtain lower processing costs by processing chip cards instead of magstripe cards.
- Key entry (for customer not present mail and telephone order)
- Refunds and adjustments
- Settlement (including automatic)
- Remote initialisation and software update
- POS integration
- Multi-merchant capabilities
- Pen or PIN authorization by the customer
- Surcharge function
- Secure password operation