We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Credit Card Terminal?

By David White
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A credit card terminal is a device that business owners who specialize in retail sales find very handy. This small machine comes in a few different forms, but all have the same purpose: to authenticate the credit cards handed over by customers in order to pay for goods and/or services.

The primary purpose of a credit card terminal is the protection of the retailer who employs it. If a retailer accepts as payment a credit card that has expired or been stolen or that is otherwise invalid, then that payment will never be made and the retailer will have essentially given those goods or services away. This is an eventuality all retailers want to avoid, so many find it necessary to employ at least one credit card terminal.

The most commonly viewed credit card terminal these days is one that has a keypad and a sliding slot. The retailer slides the credit card through the slot, in the process recording the data set on the magnetic strip on the back of the credit card. In many cases, the retailer must also use the keypad to type in the last four digits of the credit card number as a secondary form of security.

The data is sent from the credit card terminal to a verification center, which sends a thumbs-up or thumbs-down message back to the retailer. If everything is A-OK, then the retailer can accept the credit card as payment for goods or services rendered. If the card is declined, however, the retailer has the right to refuse the sale.

The typical credit card terminal is connected to a phone line. The credit card terminal acts as a sort of modem, transmitting the data to the verification center. Not every credit card terminal is like this, however. Some are wireless, relying on Wi-Fi or cellular communications for data verification.

Some models of credit card terminal do not require any interaction on the part of the retailer. These automatic models do the data transmission themselves, repeating the message that comes back from the verification center, usually in light emitting diode (LED) form. This kind of credit card terminal is found commonly in stores that allow customers to run their own checkout procedures.

Another kind of credit card terminal does not allow instant verification. This model simply stores the data received from the credit card swipe, prints out a receipt if the customer requires it, and can transmits all data for all credit card transactions in one batch to the verification center. This kind of credit card terminal is found routinely at outdoor or mobile events, where the availability of phone lines is low or nonexistent and the retailer does not have access to a wireless credit card terminal.

Lastly, a rather new kind of credit card terminal is a Web-based service. Credit card verification can be accomplished online. If you buy things online, then you are accessing a Web-based credit card terminal. No swiping takes place except the virtual kind. Verification is nearly instantaneous.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.