Archive for September, 2014

Point of Sale System | POS Retail Merchant Card Processing

Monday, September 29th, 2014

If you’re wondering what a POS System (Point of Sale) is or interested in learning a little bit about them, stick around and read on. Although not a super exciting subject, this article will give you a high-level overview of POS systems.

As you may (or may not) have known, a POS system is used to process credit cards predominantly in retail brick-and-mortar locations. This means that in most cases, POS systems are used for customer-facing sales. The system makes these sales, especially relating to debit and credit card transactions, seamless.

Of course, a power source and Internet connectivity are critical for operability, but the key ingredient of the system is a merchant account that allows debit & credit card processing through the system.

Why Use a POS System?

pos systemA POS system is far more robust than just a basic credit card terminal, as it is a fully computerized cash register, running special POS software. These days, a POS cash register consists of a computer, monitor, printer, cash drawer, barcode scanner, and credit card reader. Advanced POS systems are comprised of additional hardware pieces. Common add-ons can include a customer display, a pin pad with a signature capture device and even things you see in your local grocery store like a weight scale..

Modern POS systems are highly functional and incorporate the latest technology, including Windows operating systems and are programmed for the specific merchant. The functionality can handle a multitude of customer-serving actions such as returns and exchanges, customer loyalty programs and gift cards.

If there is anything sexy about point of sale systems, it’s the back-office functionality that they offer. An advanced point of sale system can help a merchant to manage payroll, inventory, purchase and receive goods from other locations, track sales trends and market to customers. Did you ever receive a coupon upon checkout from a store for a product that you regularly purchase? Yeah, that was the POS system’s doing.

Different features may be available on POS systems implemented in different types of stores. Some systems are designed specially for client’s needs, where large retailers have even been known to write their own specs for the systems. Most point of sale systems are more or less standard equipment, but have elements that are customizable from one merchant to another.

pos system restaurantThe hospitality industry, particularly restaurants, relies on these systems to quickly and efficiently ring up the sale and send the orders to the kitchen to be prepared. Many restaurants use touch screens with pre-programmed items to speed the process of entering the items for the employee.

Today, POS systems are even incorporating the use of tablets with wireless connectivity for even greater flexibility.

What Does a POS System Cost?

So how much does a POS system cost? Well, that obviously depends on the requirements of the merchant.

Some systems can cost tens of thousands of dollars. This would be the case for a large retail store with many checkout lanes and a lot of hardware.

A basic POS set up can range between $500 and $1500. The functionality packed into a system for that price is well worth the investment. Among tackling employee payroll tasks and other bells and whistles, the inventory management control alone can save a merchant thousands of dollars each year in spoiled or unsold inventory.

Merchants that process a steady stream of transactions on a daily basis that are not currently using a point of sale system should look into it. The use of a basic system can pay off quickly.

The key is to start small. Just get what you need at first and add to the system as required. For tight budgets, it’s possible to even get started by installing POS software on an existing PC and add pieces of hardware like a scanner, receipt printer and cash drawer.

But remember, you’ll need credit card processing services to make the whole system work. If you need more information about POS systems, or merchant account services, give us a call. We’d be happy to put you in touch with one of our partners that are knowledgeable with point of sale systems.

 

Virtual Terminals for Online Payment Processing

Tuesday, September 23rd, 2014

Welcome to Part III of Choosing Credit Card Processing Terminals. This article will provide a high-level overview of Virtual Terminals.

Virtual Terminal cardAs you might imagine, a virtual terminal is used in the virtual world, aka cyber space. Unlike the stationary and wireless terminals discussed in the 1st two parts of this series, where credit cards are swiped through physically present card readers, virtual terminals are able to process debit and credit cards as card-not-present transactions.

A virtual terminal is simply a piece of software that, when paired with a payment gateway from a merchant account provider, enables a business owner to key-in a customer’s credit card information and process the transaction.

Setting Up a Virtual Terminal

When setting up the credit card payment gateway through the credit card processor, there is usually an option to add a virtual terminal. While virtual terminals are sometimes offered at no additional cost, companies like PayPal charge as much as $30/month for this service.

Keying-in transactions through a virtual terminal is very similar to a customer entering their own information when purchasing though a website’s secure shopping cart checkout page. The credit card processing fees are the same for the merchant, although slightly higher than swiped transactions.

The main benefit of using a virtual terminal is the convenience it provides for the merchant. Virtual terminals allow businesses to accept credit cards over the phone, from mail orders or online, efficiently and securely processing transactions from their personal computer, and actually, from any computer with Internet access throughout the world.

Who Should Use a Virtual Terminal?

Due to the fact that the customer and card are not present during the sale, many mail order/ telephone order (MOTO) businesses use a virtual terminal to process customer transactions. Sometimes these businesses are subscription type services.

Virtual terminals work well for subscription type services in which recurring payments can easily be processed on a specified date. In addition to automatically billing a card on schedule, some virtual terminal programs have the ability to ACH (Automated Clearing House) customer funds directly from a checking account.

Using a virtual terminal can be ideal in situations where a custom pricing comes into play for goods or services sold online. For example, professional services of an interior designer or home building inspector can vary based on the size of the home. A merchant can determine price based on square footage, contact the customer for approval, collect credit card data, and process the transaction via the virtual terminal over the phone. Declines and approvals take place almost instantly.

Also, a business owner with a brick-and-mortar location can take credit card payments face-to-face from customers in the store without a stationary terminal by manually inputting the card data into the virtual terminal. Due to the higher rates for keyed-in transactions, this method is only recommended when it is not possible for a business to use a stationary terminal.

Using A Virtual Terminal

virtual terminalUsing a virtual terminal is simple. The merchant logs into a secure page on the payment gateway provider’s site, accessing their account. Once logged in, the merchant can fill out form fields, entering the customer information including the credit card data and then processes the order. The merchant has the ability to email receipts directly to customers. The merchant can also quickly process refunds through the virtual terminal.

Determining whether or not your business should incorporate a virtual credit card processing terminal is relatively straightforward. Hopefully the information above will help clear up any confusion, rather than further confuse you. If you have any questions regarding virtual terminals, reach out to us. We’d be happy to put you in touch with one of our processing partners that can answer any of your questions.

Learn about complete POS (point of sale) systems in this article…

Wireless & Mobile Card Processing Terminals

Thursday, September 18th, 2014

Welcome to Part II of Choosing Credit Card Processing Terminals.

If you’ve just stumbled upon this article about wireless credit card processing terminals via an Internet search, it’s likely that you already have an idea what you’re looking for; namely, wireless or Smart Phone (mobile) debit and credit card readers. Much of the information here may be a review, but maybe not. In any event, if you’re in need of a wireless terminal for your business or organization, we’d be happy to speak with you directly.

Wireless card terminals were designed specifically for the purpose of processing credit cards in situations where a dedicated phone line or Internet connection is not available. However, simply because a terminal is wireless does not mean it will work on Gilligan’s Island. Transactions are transmitted via cellular signal and have a specific range of operability. In most cases, these terminals are also able to function via battery power, obviously a requirement when power is not available.

Some wireless terminals include a port for a power source and a port phone or Ethernet. This option enables the terminal to be used as a stationary (traditional) credit card reader when a line and power source is available.

Although rates will be the same to process credit cards via a wired and wireless connection, a specific merchant account for wireless will be required in which a wireless fee ranging from $15-$25 per month will apply. There is typically a wireless transaction fee per transaction as well.

To Use a Wireless Terminal or to Not Use a Wireless Terminal

wireless credit card terminalSome businesses, such as taxi or limo services, delivery services, and home contractors depend on wireless credit card readers, but unless a business has a specific need to process credit cards remotely, there is no advantage to having a wireless terminal.

As with stationary terminals, leasing a wireless terminal is not recommended. The cost of purchasing a terminal will end up being far less than the business would pay over the term of the lease.

New technology, specifically relating to the Smart Phone generation, has made wireless terminals obsolete. Apps and small reader devices can easily be installed on a Smart Phone, instantly converting the device to a wireless credit card reader. Companies such as Square offer reasonably low rates and fees, making their service attractive to small businesses that process low dollar transactions at a low volume each month. Yes, there are pros to the latest Smart Phone technology, but there are also cons.

As stated above, give us a call if you’re unsure which option is best for your business. We’ll help steer you in the right direction for your business’ needs.

Virtual Terminals

Check out Part III of Choosing Credit Card Processing Terminals (Virtual Terminals) here.

Credit Card Processing Terminals | Choosing a Terminal

Monday, September 15th, 2014

It goes without saying that businesses with products or services for sale must have a method of collecting payments from customers.  In this day and age, paying by check is a somewhat antiquated method (and may even disappear sometime sooner or later).  In contrast, credit card processing services are favorable to most businesses and preferred by customers.

Traditional credit card processing terminals with a magnetic strip reader have been in use for 40 years and are still being widely used. When it comes to taking payments online, services such as PayPal work for small volume merchants;  however, most businesses find that a merchant account and payment gateway are more efficient and effective for online payment processing.

This article series will discuss different credit card processing terminals and their uses: Stationary credit card terminals, wireless terminals, virtual terminals, and complete point-of-sale systems.

Stationary Credit Card Terminals

stationary terminalStationary credit card terminals are mostly used in brick-and-mortar locations, where having a dedicated phone or Internet line for connectivity and power source is available and not a hindrance.

Most of us are familiar with what these terminals look like, as they are common in many retail locations. We have all swiped our cards through the reader possibly thousands of times and scribbled away on the authorization slip produced by the tiny printer.

Traditional stationary terminals have a display screen, keypad, and the magnetic strip reader on one of the sides. Some stationary terminals come with a printer attached while others do not, requiring a separate detached printer. However, the stationary terminals used in these brick-and-mortar stores will soon be less familiar to us due to a small yet major upgrade.

As mentioned above, the technology behind stationary terminals is over 40 years old. Despite the fact that many newer terminals quickly and efficiently process transactions via IP connectivity rather than phone line, the static method in which card data is processed has made these terminals the subject of security breaches. The rising costs to the credit card industry relating to stolen credit card information and the fraud associated with it, has led to the development of a new technology known as EMV.

emv chip cardEMV (EuroPay, MasterCard, Visa) technology is prevalent in Europe and will soon be much more common in the United States as a result of the card associations’ push for entities involved in processing face-to-face transactions to be EMV compliant by October 2015. Entities that are not compliant may be required to accept some sort of liability in the event of a security breach. For merchants, this mainly means that their credit card terminals will need to be upgraded to an EMV terminal with an EMV port.

When a credit card is inserted into this special EMV port, the terminal reads an embedded chip in the credit card – rather than the static data on the magnetic strip. The chip uniquely encrypts the credit card information for each individual transaction, making it impossible for stolen data to be deciphered.

Most EMV terminals being manufactured today also have the old magnetic strip reader, but it’s likely that sometime in the future it will disappear.

Choosing a Stationary Terminal

Just like everything else in the world, when it comes to choosing a terminal, there are often too many choices that end up making life more confusing. 

If you’re just starting your business, and are sure that a stationary terminal will work for you (the case with most brick-and-mortar locations) you’ll first contact a credit card processing company and set up a merchant account.

The merchant account provider will set you up with a credit card processing terminal that is programmed to work for your business. Although most terminals are very similar, it’s generally a good idea to choose a terminal from a highly reputable brand. Popular brands in the U.S. include Verifone, Hypercom and Lipman. Ask about these brands, and have the merchant account provider make recommendations based on your businesses requirements. And, you might as well chose an EMV equipped terminal, as it will be necessary in the future with the EMV liability shift.

lease or buyBuy or Lease?

Merchant account providers usually offer two options; purchase the credit card terminal and own it outright, or lease it. The average terminal costs about $500. Not outrageously expensive, but significant enough that some new businesses opt to lease a terminal because it seems like it’s the least expensive option when just getting started.

However, leasing is rarely the best option. Some providers lock merchants into lease deals as high as $50 a month for a term as long as 2 years. Only 10 months of lease payments would have covered the cost for the new terminal – and so over the term of the lease the merchant would have been able to buy two or three terminals for the same price!

In most cases, terminals can be re-programmed to work with another provider. This may be necessary if a merchant decides to switch credit card processors down the road.

If you have an existing business, and are upgrading your existing equipment, it’s also best to purchase. In some cases, existing businesses are eligible for promotions for free terminals. A partner of The Transaction Group is actually giving away FREE EMV terminals to businesses that are currently processing, in order to encourage the shift to EMV compliance.

Wireless Terminals

Some merchants depend on the functionality of wireless terminals. To learn about Wireless Credit Card Terminals please see the next article in this series.

Building an Ecommerce Web Store | Part 2 of Setting Up an Online Store

Thursday, September 11th, 2014

If you have read Part 1 of this series, Setting Up a New Online Business, and have set up your domain and website is complete, congratulations! The battle is almost won. Below you will learn the basic final steps to getting your ecommerce store operational. 

Step 4:

online-shopping-cartFind an online shopping cart provider for your web store. The online shopping cart is simply a piece of software or script that runs on your website. Some shopping carts are free, while others have low monthly fees but offer additional tools. 1ShoppingCart is an excellent option that offers carts for businesses of all sizes and has incredible tools to grow your business.

When searching for shopping cart providers, it’s essential to make sure that the online shopping cart you select is compatible with a major payment gateway like Authorize.net. Once you find a shopping cart system, install it using your website’s cPanel (control panel). Most hosting providers provide technical support at no charge and can walk you through this process.

Step 5:

In order to actually accept credit cards, you’ll need a merchant account and payment gateway from a merchant account provider. Finding a provider is not as simple as selecting the one with the best rate, as fees between providers can vary and it’s not always apples to apples (if you’re interested in learning about rates and fees, check out this article that will give you a general overview to help you understand).

A lower rate is ideal; however, fees associated with the merchant account can push a good rate out the window. Some processing companies intentionally quote low rates as a ploy, then make up for them with service charges and hidden fees. Be sure to get rates and all applicable fees in writing from each provider and compare them prior to signing a contract. If not, an early termination fee may have you frustratingly locked into a contract. For a glossary of jargon that you may hear when speaking with a merchant account advisor or salesperson when you get to the last step, click here.

Start Selling

After your online store is set up and configured how you like, you’ll be ready to start selling on your web store. When just getting started, you can likely fulfill orders yourself. As business grows, you may want to look into a fulfillment service to make your life easier.

Good luck!