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 of 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 Merchant Terminal?

Mary Elizabeth
By
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.

Today, many retail merchants do much of their business through credit card transactions. In order to be able to accept credit cards, a merchant must take several steps, including the establishment of a merchant account. A credit card terminal, also known as a merchant terminal, is one of the key elements in this cashless commerce system, allowing the merchant to accept credit cards for purchases.

The typical merchant terminal in 2010 was an electronic device requiring two connections, one to a power supply and one to a telephone line. Besides this, it had several other important components: a modem; a memory card; a magnetic stripe reader to swipe cards, typically placed on the right-hand side or toward the top of the device; a keypad, through which a credit card’s number can be manually entered; and an LCD screen, on which information such as authorization is communicated. Depending on its age and functionality, a printer may have been included.

The basic functionality of the merchant terminal is the same, no matter what its specific features are. The customer or merchant swipes the card or keys in the credit card number. The terminal contacts the network for authorization. All of the transfer of funds — from the customer’s account to the merchant’s bank — takes place behind the scenes, so that neither the customer nor the merchant has to attend to them. Records of the transaction are kept by multiple parties, so that if there is a question about the transaction for any reason, such as a merchandise return, the details are available.

Merchant terminals can complete transactions with debit cards as well as credit cards. Some are also capable of processing gift cards and verifying checks. The technology is undergoing constant development, so other possibilities may arise as well.

One of the ongoing developments in merchant terminals is technology to make them mobile. This is an important development for merchants who do not work out of a storefront, and even some who do. Airlines that offer in-flight purchase options and home repair specialists who do their work in their customer’s basement or under the sink benefit from devices that allow them to process credit card transactions away from their base of operations. As of 2009, Apple store employees were processing transactions on iPod touch units that are specially designed to accept credit cards.

The mobile technology is taking several different forms. Some developers have created software that bases the merchant terminal around the merchant’s laptop, while others rely on the merchant’s cell phone or a wireless terminal. As with the plug-in terminal, developments in the field are ongoing.

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.
Mary Elizabeth
By Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the Internet. In addition to writing articles on art, literature, and music for SmartCapitalMind, Mary works as a teacher, composer, and author who has written books, study guides, and teaching materials. Mary has also created music composition content for Sibelius Software. She earned her B.A. from University of Chicago's writing program and an M.A. from the University of Vermont.
Discussion Comments
Mary Elizabeth
Mary Elizabeth
Passionate about reading, writing, and research, Mary Elizabeth is dedicated to correcting misinformation on the...
Learn more
SmartCapitalMind, in your inbox

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

SmartCapitalMind, in your inbox

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