Eftpos Terminals – How it works

When people go out shopping and the store accepts debit or credit card payments, when an item or service is taken, the cashiers would use a device where the card is swiped in and the details are keyed in. What some people don’t know is that these devices are called eftpos terminals. The word eftpos stands for electronic funds transfer at point of sale and is a very common payment option offered by different kinds of establishments from super markets to restaurants and even hotels. So how do eftpos terminals work? Here are three easy steps that eftpos terminals follow in order to accept card-based transactions.

Card swiping

Eftpos terminals are needed when a customer has settled for using the cashless payment in the form of a debit or credit card payment. The first thing done after confirming that the customer will use his or her debit card is that the card is swiped in the eftpos terminal, specifically at the part where there is a slot on the side of the terminal. Once this is done, the card’s information will reflect on the screen and the customer has to input his PIN number to allow access to the account.

eftpos-machine© www.posmate.co.nz

Sends information

After the access to the account has been confirmed, an exchange of information is then followed. When the card has been swiped, a lot of actions have already been taken which prepares it for the information exchange. The first one is that the business transaction has assigned a unique tracking number and is followed with the business’s identification number as well as the eftpos terminal number. Eftpos terminals are built with communication networks which is responsible for contacting the bank connected with the terminal. The bank in return will return its decision to allow the transaction or not.

Transaction gets credited

Before the bank allows the transaction submitted by the eftpos terminals, it performs a quick check whether or not the credit or debit card is eligible for the transaction. This inspection is done in seconds and will quickly return with a response which allows or disallows the transaction to be made. When the transaction is allowed, the purchase of the goods or services is then credited using the credit or debit card. Otherwise, the transaction will fail for one reason or another and the customer will be forced to pay using cash.