POS Terminal (Point Of Sale Terminal)
POS Terminal (Point Of Sale terminal) was conceived as an automated version of cash register. POS terminals have undergone a tremendous transformation thereby becoming an integral part of digital payment channels and digital banking. Today, POS terminals record and track customer orders and transactions, process credit and debit card transactions, connect to other systems in network and manage inventory.
Brief history of POS Terminal (Point Of Sale terminal)
The first POS terminal was launched by IBM in 1970s. The initial versions did not have any computing or real time processing capabilities. With the advent of personal computers (PCs), in 1990s, it was realised that PCs could automate a range of functionalities of a POS terminal. Today, there are many players in the world providing hardware and software for POS terminals. For large businesses, dedicated data base server interconnects various POS terminals, retrieve and process data.
POS terminals can be broadly classified into two categories. POS terminal for retail merchants are normally provided with a bar code reader, a card reader to handle debit/ credit card payments and a printer. The other one is a small, payment enabled device with its own card reader, software, printer and connectivity. This kind of POS terminals is used by banks and payment systems.
POS terminal (Point Of Sale terminal) characteristics
Banks / POS vendors install POS terminals at merchant locations. POS terminal consists of devices for reading debit/ credit/ prepaid cards and inbuilt printers. They are connected to computer systems and modems. POS terminals are enabled for online authorisation of payment cards.
Point of sale terminals perform the task of authorising transactions carried out using payment cards. For this process, a POS terminal transacts with a Data Centre either via a PSTN line or through GPRS. A PSTN POS terminal interacts to the Data Centre through telephone line while GPRS make use of SIM cards/ mobile data communication methods for connecting to Data Centre. A GPRS POS terminal offers the freedom to move it anywhere while PSTN terminal has to be maintained at a particular space, connected to the telephone line.
Latest models of POS terminals are enabled for biometric reading and verifications and NFC (Near Field Communication).
Key benefits of POS terminals (Point Of Sale terminals)
POS terminals offer benefits to both merchants and customers.
POS Terminals-Benefits to merchants
• Ensures enhanced customer convenience and experience thereby increasing sale of products and services
• Acceptance of payments through cards encourages to customers to spend more thereby increasing revenue for merchants.
• Reduced cash transactions thereby minimising fake note transactions, robbery and thefts. EMV card based transactions minimises frauds associated with card cloning.
• Facility for generation of transaction reports
• Minimises work load
POS Terminals-Benefits to customers
• Freedom from carrying cash and minimises associated risks. Helps to save time to withdraw cash from bank/ ATM.
• Credit cards offer grace period facility delaying actual payments. Banks offer EMI products for credit / debit card based transactions
• Card based transactions enable customers to earn reward points/ cash backs announced by card issuers.
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