Retail Credit Card Processing

Retail credit card processing often begins with a POS (Point of Sale) system, which automates the process of accepting credit card payments. The system has several parts, some or all of which may be integrated into a single device, which may be referred to as an “all-in-one POS.” In addition, the software, and the entire system, may be specialized for particular industries, including restaurants, quick food service, pizza and delivery establishments, delis, bars, liquor stores, coffee shops, clothing stores, video rental stores, general retail operations, salons, and grocery stores, for example.

The elements of the retail credit card processing system are:

• software – either generic or specialized to the industry
• a computer
• a monitor for the clerk (possibly with touchscreen technology
• a display for the customer
• a cash drawer
• a receipt printer
• a card scanner
• a PIN pad, which may include a signature capturer
• a merchandise barcode scanner
• a scale for merchandise sold by weight

The software will likely be designed to deal with all the different marketing techniques that are used and affect sales. This includes allowance for accepting coupons and gift cards and the ability to keep track of a customer loyalty program.

Recently, there have been developments in mobile equipment to allow retailers who are mobile – like pushcart merchants or airlines offering inflight purchases – process credit card transactions, allowing such merchants to accept credit cardsas well as cash and checks.   In this case, a variety of devices may be employed to process credit cards, including a laptop, a cell phone, an iPod Touch, a touch-tone phone, or a wireless terminal.

Besides the equipment, the retail merchant must secure merchant accountto enable the acceptance of credit cards.

How the POS System Works

The purchase begins with the customer selecting one or more items and ringing them to a checkout location. The customer or the merchant may swipe the credit card in the POS terminal or key in the credit card number. The terminal contacts the network and the transaction is either accepted or rejected, based on the customer’s account details. If it is accepted, the funds are transferred from the customer’s credit card account to the merchant’s bank account on behalf of the customer and added to the customer’s monthly credit card bill. If there is something unusual about the purchase – such as a purchase in a country that is not the customer’s place of residence – or the amount exceeds the customer’s credit line, the charge may be refused. Customers making legitimate purchases can avoid some refusals by informing their credit card companies if they will be traveling and/or by pre-authorizing purchases that might other throw up a flag for their amount.

Specialized Systems for Retail Credit Card Processing

POS software for particular industries may have specialized features aimed at helping the business cut costs and perform more effectively. A specialized touchscreen for the industry is a likely feature, and is capable of further customization for the particular merchant’s needs. For example, the POS software for a pizza parlor might include the ability to accept online orders, payroll management, delivery scheduling, and a stock manager. It might also be designed to manage pricing on a half-and-half pizza (like cheese on one side, two toppings on the other), crust types, and pizza sizes For a sit-down restaurant, on the other hand, features could include table management, reservations, and split tickets.

Sources

posnation.com