Businesses cannot survive without the ability to process credit card payments. Although the process of completing a credit card payment takes only a few seconds, the process is overwhelmingly complex, as there are a multiple number of parties and processes that may be involved.
If you are a merchant, you may not need an in-depth understanding of the process, but a knowledge of the principles and the parties involved may help to clarify how, and where the fees that you are charged originate. On the surface, the process that takes a few seconds, may appear to be simple, but it depends almost entirely on the credit card processing machines to initiate the process. Knowing more about the types of available of credit card processing machines, may help you to make an appropriate choice that will apply to the type of business, and the manner in which it is operated.
Although they may be slowly headed toward obsolescence, dial up terminals are still in use in payment processing. The machines are an inexpensive option, as they are simple to operate. Communication and data transmission is done via telephone lines that connect the machine to the credit card processor. Despite the simplicity that is offered, these machines also present disadvantages that are difficult to overcome in today's fast moving world of instant communication. The major disadvantage is the length of time that is needed to complete the payment process. Dial up terminals can take up to 10 times longer than other types, and they are slowly being replaced by other types.
One type of payment mode that will displace the earlier models, is the use of wireless credit card processing machines. These machines use the 802.11 wireless communication protocols, which are the same technology used by cell phone service providers. Although they may be more costly at this point, wireless standards continue to progress, with the advantage of providing much faster processing speeds that are now necessary. The biggest benefit is that these machines can be used anywhere, and at anytime, without being tethered to anything else.
Some terminals connect to credit card payment processors with high speed Internet connection. They are an upgrade from the dial-up models, and with the use of Internet Protocol, they can be considerably faster than the dial-up models. As bandwidth costs continue to decline, the IP terminal may become more commonplace as more bandwidth offers the ability to support multiple credit card processing machines.
A virtual terminal can also be a suitable alternative. A virtual terminal is not really a terminal, but actually software that runs on your computer. The software processes the credit card payments, while the computer is attached to the card reader. Depending on the type of your business, this type of machine may present more disadvantages that make them unsuitable for your purpose. However, they can present several advantages, such as better control for the handling of recurring billing, and easy access to customer records, as well as compliance to PCI DSS. For a smaller business, it is easier to integrate payment methods with customer contact information, so that customers can be alerted with email messaging.