The traditional way to accept a card payment, and one that is used by a majority of merchants in the UK, is to use a terminal that is located in the merchant’s shop which is connected to their acquiring bank by a telephone land line. Where a chip and PIN card is presented, a terminal captures the card’s data and provides an authorisation. A typical process is shown in the simple step-by-step process below:
- The customer’s card is placed in the terminal that captures the card’s details.
- The cardholder authenticates themselves by putting in their PIN.
- The terminal passes the card’s details onto the merchant’s acquiring bank.
- The acquiring bank passes the details onto the card’s issuer who provides an authorisation that is then passed back to the terminal.
- The terminal prints out two copies of the till receipt.
- The customer is given the goods they have purchased, their card and a copy of the terminal receipt.
- The merchant keeps a copy (merchant copy) of the terminal receipt for their records.
- After the authorisation has been given, the sale proceeds are credited to the merchant’s bank account within four working days.
Set out below are the different types of card terminal; some are provided by the merchant’s acquiring bank. However, a merchant may need to source a terminal themselves.
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- Bank Owned Terminal
- Retailer Owned Terminal
- Integrated Point of Sale Terminal
- Mobile Terminal
- Portable Terminal
- Petrol or Fuel
- Polled Terminal
- Internet ‘Till’
(Information about the accessibility of terminals is currently under construction. Please check back at a later date for details.)
Bank Owned Terminal
The majority of merchants will have a bank owned terminal. Typically, the bank will rent out a terminal for a set period of time under a rental agreement. The terminal rental is usually charged on a monthly basis + VAT, and the bank will provide terminal support in case it malfunctions; and ensure it has the most up to date software to process transactions.
Retailer Owned Terminal
Although bank owned terminals are the most common choice, some retailers or merchants source their own terminals. Where a merchant has any problems with the terminal, they will need to ask their terminal supplier to rectify these.
An acquiring bank will discuss with their merchant which terminals have been approved to work with their particular service and what action to take.
Integrated Point of Sale Terminal
This is a specialised terminal or Integrated Point of Sale (IPOS) that is linked to other devices to provide a bespoke retail solution. For example, a merchant may scan in their customer’s purchases using a bar code reader, these are then itemised and a total amount is sent to the terminal to process the card transaction.
In the majority of cases, this terminal type is unlikely to have been supplied by an acquiring bank, but they will assist the merchant to ensure that transactions can be passed from the merchant’s IPOS to their systems.
Mobile Terminal
Instead of being connected to an acquiring bank via a telephone land line, this terminal uses a mobile telephone connection. With this terminal type, a merchant can be away from their shop and still accept card payments. For example, where a merchant has a stall at a local show or exhibition where a land line is not available, they can use a mobile terminal.
An acquiring bank can advise if they offer this terminal type or put their merchant in touch with a suitable supplier.
Portable Terminal
The difference between this terminal and a mobile terminal is that it can be used within a specified radius of a base station, which itself is connected to the merchant’s telephone line, and is sited in their retail outlet.
Portable terminals enable a merchant to take the terminal to the customer. For example, in a restaurant, a merchant can take the terminal to their customer’s table and process a chip and PIN transaction there.
Petrol or Fuel
This is a specialised terminal for petrol retailers that is designed to process Fuel Cards as well as conventional credit and debit cards.
A merchant will need to discuss with their acquiring bank if they provide this type of terminal or whether they will need an arrangement with a terminal supplier.
Polled Terminal
A specialised terminal that can store accepted card transactions through the day and then transmit their details to an acquiring bank at night. This can also be referred to as a predominantly off-line terminal or POT. Restaurants that have the facility to accept tips or gratuities often use this terminal type.
A merchant will need to discus with their acquiring bank whether this terminal type would be best suited to the way they wish to operate their business.
Internet ‘Till’
The terminals listed above are physical pieces of hardware that are used to accept card transactions when the merchant is with their customer - or used to manually key in the card details for a card not present transaction.
With an internet ‘till’, a merchant does not use a standard, physical, terminal to process their transactions. A merchant will use a virtual terminal or payment page, provided by a payment service provider, on their website into which a customer’s card details are securely entered for processing. Further details on what needs to be considered when taking payments over the internet are contained in the Internet Trading Section.
EXAMPLES OF CARD TERMINALS
For more information about vendors and products that have been evaluated under the Common Criteria against the APACS PED Protection Profile follow this link.
