At their heart, payment terminals have a very simple role: processing customer payments. Yet modern technological advances alongside increasingly diverse payment methods have forced payment terminals to adapt. Where payment terminals were once simple payment acceptance methods, now they are commonly part of a larger system that performs functionality ranging from accepting contactless payments to tracking inventory. For small businesses, selecting from the different types of payment terminals available can be a confusing and time-consuming decision.
With all of this in mind, today we will be defining payment terminals, reviewing traditional payment terminals which are still in use today, discussing more modern options for POS terminals, and finally identify what alternatives exist for mobile payment processing.

What is a Payment Terminal?
Payment terminal terminals can refer to any machines built to accept electronic card payments including POS terminals, credit card terminals, PDQ terminals, etc. All of these hardware solutions perform the same essential function, but payment terminals do vary dramatically in both capability and performance.
Payment terminals are powered by software to back that hardware. In fact, much of the capability and performance differences we just mentioned are more tied to software potential than hardware. Selecting the proper payment terminal comes down to finding the hardware and software requirements you need to keep your business profitable and secure.

Traditional Payment Terminals for Small Businesses
Traditional payment terminals were essentially an extension of the cash register. Customers produced a mode of payment, that payment was accepted, the transaction was completed behind the scenes, and the cycle ended. Modern examples of traditional payment terminals include standard credit card machines. Credit card machines are the perfect choice for reliability, security, and affordability.
Yet the relative simplicity of credit card and wireless credit card machines does not preclude them from being powerful. Modern credit card machines are capable of accepting chip cards, contactless payment methods such as Google Wallet or Apple Pay, and nearly all other forms of electronic payments, all backed by the highest available security protocols. Even traditional payment terminals act more like computers in the modern age.
Integrated POS Payment Terminals
According to Investopedia: “A point-of-sale (POS) terminal is a hardware system for processing card payments at retail locations. Software to read magnetic strips of credit and debit cards is embedded in the hardware. Portable devices (i.e., not terminals anchored to a counter), either proprietary or third-party, as well as contactless capabilities for emerging forms of mobile payments, represent the next generation of POS systems.”
In other words, the lines between traditional credit card machines, modern POS systems, and mobile systems are becoming more blurred as technology progresses. The primary differences between standard payment terminals and integrated POS payment terminals include:
Integration with other business systems: the biggest selling point for modern POS payment terminals is almost certainly their ability to “speak” to the other software systems in your business. This can include tracking customer data, buying patterns, inventory, and much more.
Superior software: along these lines POS systems often come with a market of native and third-party apps that can be customized on your interface per the needs of your business.
Superior hardware capabilities (in most cases): last but not least, POS systems generally represent the cutting edge for payment terminal hardware technology. While it is not necessarily true that POS systems will outperform traditional credit card machines, it is more likely.

Modern Alternatives to Payment Terminals
Last but not least, the concept of a payment terminal has recently been pushed aside by alternatives including card reading hardware that pairs with smart devices. These types of pseudo-payment terminals rely on a third-party device (typically a phone or tablet) to complete the transaction. Many independent contractors and/or mobile businesses find this method of accepting payments to fit their individual needs.
It should be noted that while mobile payment processing is not necessarily less secure than POS terminal processing, it certainly can be. That is why business owners and operators should be sure to understand how their payments are being protected both during and after the point of purchase.
Payment Processing Hardware from True Merchant
At True Merchant, we believe in making payment processing as straightforward as possible. That starts with one of our complimentary rate reviews for small businesses. This can be done for businesses just getting started or those who are looking for a change. One of our qualified payment processing professionals will work with you to identify what pricing options best fit your needs and to walk you through the processing fees, fee structure, and how we can best serve you!
Our experienced team offers a wide range of services including credit card payments, debit card payments, NFC payments, payment processing hardware, and much more. To learn more, give us a call or email today so we can discuss how exactly True Merchant can help your business!