Point of Sale Terminal

Posted in Marketing and Strategy Terms, Total Reads: 300

Definition: Point of Sale Terminal

A point of sale terminal (POS terminal) is an automated device used to make payments through cards at retail outlets.

A POS terminal has the following capabilities:

• Interpret information from the credit or debit card of a person

• Verify if there are enough funds in a customer’s bank account

• Transfer the funds from the customer’s account to the seller’s account as per the sale amount

• Make a record of the transaction and print the receipt

POS terminals are electronic devices with hardware and software integrated into them which allows the retail locations to receive card payments without updating their cash registers to read cards directly. The size of the business and the terms from the supplier determine the costs of fitting POS terminals. Small merchants can rent the systems and may have to pay an additional per-transaction fee.

The trend is away from the traditional use of just magnetic stripe reader as more options open up for mobile payments.

For example, a POS system for a restaurant will likely have all menu items stored in a database that can be retrieved for information in numerous ways. POS terminals are used in most industries that have a POS such as a service desk, including restaurants, lodging & entertainment facilities, and museums.


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