New POS Technology Available to Retailers in 2012

By Shannon Martin, shannon.martin@onlinemediapartner.com

There are a variety of new technologies that will become available throughout 2012 to small business owners looking for ways to process credit and debit cards. In the past, business have had to rely on costly terminals purchased from merchant account providers who charged not only for the equipment, but also for the processing of the cards used by a business’ customers.

This year, however, there will be a number of new technologies introduced on the market that will make the old system of credit card processing obsolete. POS or point-of-sale technologies have been getting a lot of press coverage because of how these technologies will change the way small business operate.

Perhaps the most talked about advance in POS technology is the use of mobile card readers. These devices are usually given away for a small fee or for free by merchant account providers and easily connect to a smartphone or tablet computer. These card readers are typically less than two inches long by two inches wide, making them easy to carry and connect. The devices are capable of scanning the magnetic strip of any credit or debit card run through the device, essentially making a card reader out of any mobile device.

An application that is downloaded onto the mobile device allows a small business owner to send the card information to a credit card processor, store the purchase information for later, and even provide his or her customer with a receipt. Since the devices are used with mobile technology, they can process cards anywhere the device can connect to a network. This means that a business such as landscapers and plumbers can collect payments from customers in the field. Businesses that routinely operate from different locations, such as traveling craft fairs, will be able to accept credit card payments from customers at every stop along their tour routes.

The fees that are charged to businesses utilizing this technology can offer significant savings over traditional point of sale units. Rather than pay high fees every month or year for equipment rental and access to the processing system, many of these devices simply charge businesses a flat percentage fee of the total amount of the transaction. This means that businesses whose customers do not often use credit cards can still offer their customers this payment options without running the risk that their investment will not pay off in the long run. Furthermore, flat percentage pricing allows smaller and newer businesses the ability to accept credit cards without having to make large up front investments in credit card equipment.

Another much talked about point-of-sale technology is the rise of mobile payments. To use this technology, both the business and the consumer download an application to their respective mobile devices that allows them to transmit and receive payments from customers. Once installed, a customer is able to enter the payment and recipient information into his or her smartphone or tablet computer, and transmit the payment to the business. Both the business and customer will receive instant confirmation of the purchase, along with a receipt detailing the items and/or services that were bought.

This technology will allow businesses to receive payments from customers who do not have a credit card or who simply do not want to give their credit card information to a new business. The fees charged for the service will be in line with current fees charged on credit card transactions. While the business can receive the money almost instantly, a customer will have the option of having charges appear on his or her credit card statement or being added to his or her cell phone bill at the end of the month.

Shannon Martin is editor of MerchantSeek.com, a merchant referral gateway that has been offering merchant account reviews for over 10 years. She can be reached at shannon.martin@onlinemediapartner.com.

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