Credit card swipe machines, enhancing the payment options
A credit card swipe machine also known as credit card terminal is a device that transfers fund electronically from the cardholders’ account to the merchant’s account, which is done when the machine interacts with the credit card. The machine has got a screen, a means that captures information from payments card, security keypad for entering the PIN and also a network connection that makes access to the payment network for authorization.
How does it work?
The credit card terminals generally operate in conjunction with a POS system which could range from cash registers to wireless mobile applications that remain attached either to a phone or a tablet. The machine allows the user to swipe the card, which for security is then authenticated. As the funds get verified the machine makes the transfer of fund which takes a day or two to reach the merchants’ bank account.
Advantages and Disadvantages of the swipe machine
a. The increased sales-The machine helps in increasing sales as people not always prefer to pay cash for the goods. It even broadens the base of the business as it opens the doors to the customers who need to buy a product now but does not have enough money.
b. Increased sales amount- It increases the sales amount and can even result in increased impulse purchase by the customers as they need not have cash in hand to buy something they liked at the store. The customer can easily buy now and pay for it later.
c. Convenience- The machine proves to be convenient for the customers as they don’t have to wait to buy the product and can buy the goods now and pay for it in future.
d. Competitive business- It makes your business competitive as all the large scale business use credit card swipe machine and if small scale business starts using it they will level the playing field with the big competitors.
a. Complicated Record keeping- It results in complicated book-keeping and the business has to incur more time and money in keeping the record of the transactions made through the machine.
b. Fraud- It can involve fraud for which the business even has to bear some fees.
c. Disputes -It can cost the business dispute charges as the credit card can charge you with chargeback fees if a customer arises dispute.
d. Costs and fees- The business has to pay some fees or charges to the credit processing companies who charge them monthly fees and also the fees of the credit card swipe machine.