Credit Card Processing Solutions

Internet Credit Card Processing versus
Traditional POS Terminals

For years, merchants have relied on special hardware for processing credit cards.  This equipment is referred by many as a point-of-sale terminal or authorization terminal (picture shown on left).  These terminals are placed at each workstation along with a dedicated phone line to process the credit card transactions.

What makes internet-based payment processing better to use than the old fashioned point-of-sale terminals?
For starters, a terminal typically costs around $250 to $750 US.  A business requiring five workstations can easily spend over $2000 in equipment to process credit cards.  Because of the steep price, some businesses avoid purchasing altogether and opt to rent these devices at around $25 per unit monthly.  As with any electronic equipment that is used repeatedly, periodic maintenance fees will be necessary on these devices as well.

Secondly, each terminal requires a dedicated phone line to approve the credit card transactions.  This can quickly add up to big dollars annually if your business has a large sales group that requires credit card processing for each workstation.  

In contrast, web-based credit card processing requires minimal hardware to approve credit cards.  Only an internet connection is required for processing the credit card transaction. The hardware involved is practically maintenance-free, and it's much faster than standard authorization terminals.

Approval codes from the credit card network are automatically recorded per transaction, and voids or partial refunds are simple to accomplish.

Let us compare the costs involved for a business with only five sales workstations:

* Based on a nationwide average of $25 monthly lease per terminal
** Based on a nationwide average of $30/month for phone service

It is clear that utilizing a POS solution which takes advantage of internet technology will pay for itself almost immediately in a very short period of time.  Furthermore, most businesses rely on internet service for many other services and conveniences needed at the workplace. So, in actuality, the cost for internet service is often overlooked as an actual expense for the card processing.