The Green Sheet Online Edition

July 25, 2011 • Issue 11:07:02

The adaptability of POS terminals

By Dale S. Laszig
Castles Technology Co. Ltd.

Rumors of the credit card terminal's demise have been greatly exaggerated. Not only are manufacturers of next-generation POS devices keeping up to date with changing consumer behavior and payment card industry trends, their terminals remain the best option for many merchants for securely and efficiently processing credit card transactions at the POS.

Eight reasons

Here are eight reasons why millions of merchants still prefer terminals to other POS systems.

1. Built for the job: In today's content-driven society, smart phones, laptops and tablets provide a continuous stream of real-time data to consumers. With help from software applications, payment gateways and assorted smart peripherals, POS terminals can be modified to transact and process payments with e-wallets and virtual terminals. Some solutions are more secure than others, but they are still add-ons, connecting to devices that were originally designed for activities other than credit card processing. While POS terminals come in many shapes, sizes and styles, their central purpose remains the same - credit card processing. In other words, POS terminals are specifically designed and built to process electronic transactions.

2. Have one main job: Internal DVD drives in televisions can maximize space in a small apartment. Internal PIN pads in POS devices use less valuable real estate on merchants' countertops. However, many merchants prefer external PIN pads for the same reason that consumers prefer to buy stand-beside DVD players, as external devices can be replaced without overhauling entire systems. The same logic applies to embedded card processing systems that coexist inside integrated POS management systems, laptops and smart phones. Some merchants love the efficiency of integrated solutions; others prefer standalone solutions that can be de-installed, enhanced or replaced without disrupting unrelated tasks within an enterprise.

3. Are secure: In an independent study of Heartland Payment Systems Inc.'s E3 terminal, Payment Card Industry (PCI) Qualified Security Assessor Coalfire Systems Inc. observed that the E3 standalone payment terminal, and its surrounding infrastructure, can significantly reduce the risk of data compromise.

   It is accomplished by Heartland's patented method of end-to-end encryption that originates at the card reader and continues through every phase of an electronic transaction. Throughout the transaction's travels, cardholder data remains indiscernible and devoid of commercial value in the event of a data breach. Standalone payment terminals that meet current PCI PIN entry device standards provide the safest method of credit card processing because all cardholder data is transmitted, processed and stored in encrypted format to protect consumers and business owners from security breaches. E3 technology is continuously analyzed and updated to both meet and exceed industry best practices.

4. Are strong: In addition to their rigorous security requirements, terminals must meet high performance standards as well. Drop tests and quality assurance checks are routinely performed at factory and distribution points to ensure these devices will weather the wear and tear of high volume retail and hospitality environments.

   Meeting these standards is crucial for customer-facing devices. Terminal touch screens are frequently subjected to the wrong kinds of writing instruments for signature capture and their keypads have to withstand the pressure of continuous use. Terminals with internal PIN pads are frequently handed to consumers for PIN entry. Extra strong casing protects terminals from wear and tear, breakage and misuse.

5. Processes more than just payments: The expanding array of ancillary applications that can be added at the POS is due in no small measure to the efforts of merchant level salespeople, who have shown their merchants how to transform "vanilla" terminals into recurring revenue generating platforms. Today's merchants expect more than credit, debit and electronic benefits transfer from credit card systems. They want gift, loyalty, stored-value and electronic check programs, ID verification, bill payment, and geo-location technologies. Most POS terminals in the United States have dynamic, multi-application software environments that enable ancillary, nonpayment programs to be added, subtracted, or updated without requiring a major download or disturbing the terminal's core payment application.

6. Are customizable: If there's one thing we've learned from the proliferation of alternative payment methods, it's that we're no longer catering to a one-size-fits-all merchant community. Merchants have a broader array of products and services to choose from, and they want their processing platforms to reflect their personal tastes and business brands. POS manufacturers are catering to the discerning tastes of merchants by offering more choices in color, display stands and surrounding high-tech infrastructures that help terminals blend in with retail and hospitality environments. Swivel stands turn countertop terminals from clerk to customer for PIN entry or card swipe.

   Self-attended kiosks with built-in terminals and interactive video monitors sell a variety of products and services. Rugged housing protects outdoor PIN pads from weather and constant use. These peripherals can be connected via cables, or wirelessly, to standard countertop terminals in stores and restaurants.

   The graphical user interface on credit card terminals has become friendlier and more intuitive. Enlarged display screens with accompanying hot keys can be customized, eliminating unnecessary key strokes and making the most repetitive tasks readily accessible. Merchants assign keys for commonly used transactions so clerks will not have to scroll through menus to accept checks and gift cards. And merchants choose the transaction types they want to display.

7. Are competitive: Ubiquity, continuing demand and industry consolidation have driven down the unit price of terminals, making them more affordable even as they continue to surprise us with how much leading-edge technology will fit inside these small boxes.

8. Are future-proof: Google Wallet and other high-profile national initiatives are shining a light on the more secure smart card technology that's coming to the U.S. market. Many current terminal product offerings are well-positioned to enable both contact and contactless smart card transactions with integrated and peripheral smart card readers.

Taking POS to a new level

The innovation that continues to drive terminal design and manufacturing is more than just a response to the changing payments sphere; it's leading the way to a whole new level of connectivity and transaction management.

Dale S. Laszig is Senior Vice President of Sales in the United States for Castles Technology Co. Ltd., a manufacturer and global provider of smart card, contactless and POS solutions. She can be reached at 973-930-0331 or dale_laszig@castech.com.tw.

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