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Choosing The Best Terminal for Your Business

Countertops, Mobile POS & More: Choosing the Best Terminal for Your Business Selecting a terminal for your business may be a bit confusing—and that’s where this quick “how to” guide comes in handy. Not all terminals are created equal, so your best bet is choosing one to best match your short and long term business needs. For example, if you’re a clothing retailer, you may require an inventory management system that tracks your product SKU’s and keeps tight control of inventory. If you’re a food truck vendor, you might need a mobile point-of-sale system that offers the flexibility of transactional mobility. But we’re digressing... let’s back up and take a better look:

The 4 items you need to accept payments in you store

First, you’ll want to understand where the terminal fits in the picture of credit card acceptance. There are four parts that make up the merchant service process (we’ll call them the “four horsemen” of merchant services). The terminal is the “hardware” needed to process credit cards for your business, and it’s often coupled with the “software” portion (like a laptop that comes with a preinstalled Windows operating system). In addition to the Hardware and Software needs, you’ll need a Merchant Account to to track your financial balance and a Payment Processing service to send the transaction information back and forth through the payment ecosystem. Fortunately, these four horsemen can be sourced all under one provider.

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How do I decide what terminal fits best? Different terminals meet different business needs. You can narrow down the options by asking yourself some key questions:

1. How do I interact/transact with customers? 2. What are my accounting and software needs? 3. What is my business budget?

As you’re reviewing the terminals below, make sure to keep these questions in mind as you note the different features, how they apply to your business, and how they can help it grow. It doesn’t make sense if it doesn’t benefit your business.

Alright, let’s take a look.

Terminal Types 1. Countertop Devices

These little guys pack a punch. They’re great for small businesses with in-store purchases, both stationary and semi-mobile (i.e. tables in a dining establishment). While they won’t deliver the application strength and flexibility a full retail point-of-sale system would, they won’t break the bank either—which makes them great for the budget savvy business. Pro-Tip: Be sure to purchase a device that’s EMV ready (see Understanding EMV: A Small Business Merchant Perspective). Investing in an older model may seem more cost-efficient, but the inevitable need to upgrade will bite you in the long run. Price: $200-$600 Recommended Business Size • $50k-$1MM Credit Card Sales/ Year Great for: • Coffee shops, small restaurants,

corner stores, doctors’ offices, auto shops, furniture, boutique retail, laundromats, beauty shops

Connectivity • Telephone line, fixed internet, 3G Makes sense if you... • have a countertop, stationary check

out, or at a dinner table (in-store) • don’t have high frequency checkout

purchases (such as a supermarket) • are budget conscious and don’t need a

device with all the bells and whistles Downsides • Limited mobility • Limited software power (real time

inventory management, table reservations, etc.)

• Not ideal for high frequency checkout purchases.



Terminal Types (Continued) 2. Mobile / Tablets

The super-handy “Dongle” has really changed the landscape of payments over the last few years. The innovative attachments plug into the audio jack of your tablet or mobile phone so you can take your point-of-sale system anywhere! They’re awesome for small merchants on the go, and the software runs as an app downloaded right onto your phone. Caution though...many popular providers “over an all-in-one, one-pricing solution” that’s perfect for smaller to micro merchants—but as your business grows, you may want to look for a mobile terminal with an “interchange-plus” account for additional cost savings (see Pricing Demystified for more on the topic) Pro-Tip: As with countertop devices, be sure to purchase a device that’s EMV ready. Also, Apple is signaling they may be giving the ax to their audio jacks, so you might consider a future-proofed solution. Recommended Business Size • $25k-$100k Credit Card Sales/ Year Great for: • Food trucks, flea markets, hobbyists,

door to door sales, small/micro retailers

Connectivity • Wireless / 3G (the ultimate in mobility)

Makes sense if you... • don’t have a physical store location and

business moves place to place • are highly budget conscious (it can be

the cheapest option for small/micro businesses if you already have a phone or tablet)

Downsides • Depending on your provider, pricing

may be inefficient if you’re not a micro merchant (<$100k sales/year), although a good mobile terminal coupled with an interchange-plus account can be a killer combo for a merchant of any size!

• May not have end-to-end encryption • Limited software power (real-time

inventory management, table reservation, etc.)

• Must have a good internet connection to complete checkout transactions

• Not great for high-frequency checkout purchases

Price Free-$1,000 (be sure to factor in the cost of the mobile device!) Pro-Tip: Again, be ready to purchase a device that’s EMV ready... no need to invest in an old model (swipe only) just to upgrade later.

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Terminal Types (Continued) 2. Retail Point of Sale Systems

The full-on solution to servicing your customers quickly, these processing powerhouses also track your inventory, employees, and operations for maximum convenience and efficiency. While they’re the most expensive of the terminals we’ve covered, these systems are often sold with a powerful device supporting software that lets you customize a full suite of services to enhance your business. Recommended Business Size • $1MM+ Credit Card Sales/ Year Great for: • High-volume clothing stores, medium-

to-large restaurants/bars, electronic stores

Connectivity • Telephone line or fixed internet Makes sense if you... • have a countertop, stationary checkout • benefit from a full suite of software

applications (inventory management,

• table reservations, employee tracking, analytics, bill splitting, sending orders to the kitchen)

• have high-volume sales and high-frequency checkout purchases

Downsides • Upfront fixed costs can be expensive

(but for the right needs, it’s a great investment)

• May be more than your business needs (so just make sure you think through)

Price $1,000-$2,000 (be sure to factor in the cost of all necessary hardware, software, printer, PIN pad, cash register, etc.) Pro-Tip: Yep, you guessed it...make sure your device is EMV ready.

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Buying Vs. Leasing

You’ll usually have the option of purchasing a POS terminal or leasing it (which sounds more like buying a car than it actually is). Frankly, we place most lease offerings in the “unsavory business” practice category. The reason is this—many providers charge $50 to $100 per month to rent, when the average purchase price is around $400 per unit. It takes less than a year to add the math up to something less than appealing for your bottom line. But if your business is tight on startup funds, we suggest you seek other financing options first, as lease rates are often extremely and inappropriately high. Bottom Line: Don’t. Lease.

Checklist: Picking the right Credit Card Terminal Device

Does the terminal fit the way I interact with customers? (mobile vs. stationary)

Does the price meet value?

Is the terminal PCI / EMV compliant?

Will it future proof my needs so I won’t have to upgrade in the foreseeable future? (Audio vs. Lightning input jacks)

Does the terminal integrate with my accounting software?

Does it work with multiple app and software providers?

Does the terminal integrate with tools that I already use?

Does it work with my existing or new payment provider?

Will the terminal connect to the power source I have available?

Will the terminal connect to the Internet or Dial up source I have available?

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