Deciding Between Credit Card Software or a Terminal

Merchant Warehouse |

December 4, 2010

It’s not always the easiest decision to make when it comes to choosing whether you want to use a credit card terminal or some form of payment processing software for your everyday credit card transactions. Although the choice should be easy and straightforward, at times that’s just not the case.

The answer you get always depends on the questions you ask. As with any topic that is new to you, you need to get the basic gist of things first. The fundamental questions about using a terminal or software on a PC revolve around

  • the physical environment where you will be processing the credit card transactions;
  • the manner in which you obtain the credit card information;
  • the kind of business you do and the range of products and services; and
  • your (or your employees’) expertise with computers vs. the ease of learning how to use a terminal.

Simply put, the decision is based in large part on whether or not you will have easy access to a computer when you’re charging a credit card. Additionally you and/or your staff will need to know how to use whatever equipment you choose to install, whether it’s one or the other – or, in special cases, both.

The PC Way

If you have access to a computer new and powerful enough to run payment-processing software, going this route can result in numerous benefits over the more traditional credit card terminals. Many companies that use this system have found that the account management features also available to them makes the computer a catalyst for combining all facets of your business. You can access credit reports, go back and look up prior transactions, check the records for ongoing customers and process sales, all with one piece of equipment.

From a cost standpoint, payment processing software is often less expensive than many of the new credit card terminals. Sometimes you will get the software as part of the package deal you get from a merchant account provider. Just about all software today is written from the ground up to be very user friendly. The old joke about how “it doesn’t take a rocket scientist” to figure something out is particularly applicable in discussions of the friendly but incredibly powerful computers available today.

The fact is, it really did take scientists to use the first computers. But GUIs (Graphical User Interfaces) have revolutionized, and some say democratized, the computing experience, and all of this progress is reflected in the systems and software used in the payment processing industry. A PC with good payment processing software can be a real boon, though it may be more appropriate for a mail-order/telephone order (MOTO) or Internet merchant than a retail store. But both terminals and computers are used in both places, and your situation may involve using both. Give strong consideration to using payment processing software.

Tradition Works Too

On the other hand, there are good reasons for many businesses to conclude that they, in fact, are better off with a terminal. For starters, many businesses have already “bought into” a system, have already invested money into some type of terminal, register or POS system. Of course, these can sometimes be used along with payment processing software, at different store locations, for example, or different check stands in the same store. Standard “swipe” type terminals are much more compact that computers, too, and can be placed anywhere easily. For retail, physical plant merchants, terminals can be perfect tools.

Another logical reason a terminal may be preferable is when your computer might not always be turned on, or perhaps is located in an inconvenient location. If you have to take payments in real time and can’t be inconvenienced with having to access your PC, then you may in fact be better off with a standard credit card terminal. Fortunately, they’re as easy to find as they are to use.

Getting the Goods

Naturally, your budget has a lot to do with your choice. If you opt for a wireless terminal, short or long range, you will pay a premium, and you can safely figure that the farther from a wall outlet and land line you want to be, the more it will cost you. That cost differential, however, is hardly prohibitive. You get a lot of features for the money these days when you buy wisely, and from the right vendor.

There are many different manufacturers with well-respected products, and a little study and web-surfing time will acquaint you with all of them. A good terminal will not only accomplish the swiping, communications and data storage tasks, it can be optionally outfitted with a printer to bring all functions into an all-in-one package, often no bigger than a ladies’ shoebox. The same advanced technology that goes into a PC goes into these units, too – not the same exact components, not “Intel inside” and a CD drive, but the same sophistication and solid-state reliability.

The way some catalogs and web pages look, there would appear to be a never-ending supply of thousands of kinds of credit card terminals. The choices are not quite limitless, however. There appear to be so many because there are a variety of ways of outfitting these terminals, but in fact there are just a few basic differences among base models. Again, it’s merely a matter of reading, going out and looking at a few, checking one out at a friend’s business and figuring out what features you really need.

One, the Other or Both

The same advice as just given could be applied to the issue of what to buy, software or hardware. It’s your decision to make, based on very individual needs – yours. Don’t make a snap decision about anything in your business. This age-old advice is even more important in uncertain economic times. Knowing the kinds of transactions you are doing, and are likely to do in the coming months and year, is key to making an intelligent decision that will help, not hinder, your growth efforts.

A last few reminders: Software and computers can crash. You can run out of battery power on your wireless terminal or printer paper on the one at the store. Terminals will not age as quickly as software, which you may need to upgrade from time to time, and sometimes whether you like it or not. Unless you have backup power (more than a 5- or 15-minute Uninterruptible Power Supply) your software won’t be processing anything if the power goes out, but if you have a terminal with a good battery charge you’re still in business. Have fun with this decision! Make the right one by getting the right advice and reasoning it out. You’ll know what to do.