Payment terminal

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A payment terminal, also known as a point of sale (POS) terminal, credit card machine, card reader, PIN pad, EFTPOS terminal (or by the older term as PDQ terminal which stands for "Process Data Quickly"^[1]), is a device which interfaces with payment cards to make electronic funds transfers. The terminal typically consists of a secure keypad (called a PINpad) for entering PIN, a screen, a means of capturing information from payments cards and a network connection to access the payment network for authorization.

A payment terminal allows a merchant to capture required credit and debit card information and to transmit this data to the merchant services provider or bank for authorization and finally, to transfer funds to the merchant. The terminal allows the merchant or their client to swipe, insert or hold a card near the device to capture the information. They are often connected to point of sale systems so that payment amounts and confirmation of payment can be transferred automatically to the merchant's retail management system. Terminals can also be used in stand alone mode, where the merchant keys the amount into the terminal before the customer present their card and personal identification number (PIN).

The majority of card terminals today transmit data over cellular network connections and Wi-Fi. Legacy terminals communicate over standard telephone line or Ethernet connections. Some also have the ability to cache transactional data to be transmitted to the gateway processor when a connection becomes available; the major drawback to this is that immediate authorization is not available at the time the card was processed, which can subsequently result in failed payments. Wireless terminals transmit card data using Bluetooth, Wi-Fi, cellular,^{[2][promotional source?]} or even satellite networks in remote areas and onboard airplanes.

Prior to the development of payment terminals, merchants would capture card information manually using ZipZap machines.^{[citation needed]} The development of payment terminals was led by the advantage of efficiency by decreased transaction processing times and immediate authorisation^[3] of payments. In terms of security, terminals provide end to end card data encryption and auditing functions. Nevertheless, there have been some cases of POS pin pad malware.^[4] There have also been incidence of skimming at card terminals and this led to the move away from using the magnetic strip to instead capturing information using EMV standards.^[3]