A credit card terminal is a small machine designed with the purpose of authenticating credit cards that customers use when paying for goods or services. This device is of great use to business owners who specialize in retail sales. The credit card terminal checks the validity of the card and whether there is a block or hold on it or not. It does this by communicating with the card issuer. Many of the terminal manufacturers cooperate with banking services so that businesses are provided with appropriate machines when they open an account to process the credit cards that customers use.

A credit card terminal is needed where the sale takes place. Every credit card has a magnetic strip embedded in it. The customer will swipe the card through the terminal and so the information on the magnetic strip will be read. Communication is ensured between the terminal and a central computer that approves the transaction if the credit card is valid and the customer has enough credit to make that transaction. If a problem occurs, it will be signaled by an error code. Possible reasons for this to happen are the invalidity of the card, the impossibility for it to be read or the fact that it might be stolen.

Two basic styles are used when it comes to the design of a credit card terminal. There are terminals that are only operated by the clerk and others operated by the customer. In the first case the terminal may be integrated into a point of sale system and data regarding the transaction are transmitted to the computer in an instant. In the second case, the supermarket check stands are an example. A credit card terminal with debit card abilities is designed to be used by the customer, who will enter his/her personal identification number (PIN) when asked to.

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