Benefits POS Machine and how it works in the Industry

POS Machine

A POS system is made of hardware and software that is built to accept and process digital payments. It consists of hardware that can accept cards, backed by software that handles the processing of the payment, and for providing other value-added services.

Today, POS systems sit at the core of the day-to-day operations of a business, which hold especially true in the case of retailers. The earliest iterations of the POS machines were able to only accept card payments; however, with time, these machines have evolved to accept multiple modes of payments such as digital wallets, QR codes, etc.

Today’s POS machines come in a variety of shapes and sizes and have been upgraded for the next-gen consumer.

Let’s look at a few payment options it can accept.

  • Debit/credit and prepaid cards with a magnetic strip
  • Next-gen debit/credit and prepaid cards with an embedded chip
  • Contactless payments through digital wallets, UPI, and QR codes

How Does a POS Terminal Work? 

A POS terminal can accept payment via 3 methods:

  1. Swipe: Older credit and debit cards with a magnetic strip can be swiped at the terminal to initiate a payment
  2. Insert: Modern debit/credit cards come with an embedded chip that needs to be inserted into the POS machine rather than be swiped to initiate the transaction
  3. Tap: Next-gen cards come with built-in NFC which makes them contactless. By using near-field communication, a pos terminal can initiate a transaction at the tap of the NFC-enabled card. 

In the last method, all required data for the transaction to go through is carried out over encrypted radio waves making the transactions fast and secure. It’s considered to be the safest option as there is no need to swipe or insert the card which reduces the risk of data being stolen. 

What Happens When a POS Machine Initiates a Transaction?

Now that we have the basics clear, let’s have a look at what happens when a POS machine initiates a transaction!

  1. The POS machine connects to the acquirer bank that responsible for providing banking and card services to the merchant
  2. The machine then initiates an authentication request from the customer
  3. Once the authentication is approved, it contacts the card network, which is then routed to the issuing bank for approval
  4. The card issuing bank runs a few checks to validate the authenticity of the transaction and checks the account for funds
  5. Depending on the checks, the bank either approves or declines the transaction
  6. This information is then routed back to the POS terminal’s software to display transaction approved/declined status.
  7. In case of a successful transaction, a receipt for both the merchant and the customer is generated

What Are the Benefits of a POS Machine? 

Superior Customer Experience

A POS machine allows consumers to choose their payment method when making a payment, which enhances their overall experience. Moreover, since the entire process is automated with minimal human intervention, the entire process becomes seamless. This offers a superior customer experience by offering them a faster and much secure checkout experience. 

Helps in Business Growth

A POS machine with all the bells and whistles, and one which can accept a multitude of payment options results in increased sales for the business. Moreover, a cutting-edge digital POS is also capable of offering value-added services.

Customized Experience with Integrated POS

Modern POS systems can be integrated with the existing backend systems like ERP, billing, and other systems; thereby, turning the entire system into an interconnected system. It makes the entire system more efficient since instead of having disintegrated processes all over the place with different systems running on multiple payment methods, everything takes place at a single point connected to the backend server. This results in faster checkouts and offers a seamless checkout experience for the customers. 

The convenience of Flexible Payment Methods

Today’s consumer likes using options such as upi qr code, digital wallets, BHIM, etc. instead of traditional options such as credit and debit cards since they offer contactless payments. Modern POS machines can help businesses cater to the evolving needs of customers more efficiently. 

Now that you know the inner workings of a POS machine and how it’s helping businesses deliver the best possible experience to customers, it’s time to take your business to the next level! 

<<– Which is better gold or platinum?

Total Views: 131 ,

3 Comments

Leave a Reply

Your email address will not be published.

You May Also Like

  • The Best Side of bitcoin smarter

  • SEO Agency Chiang Mai Can Be Fun For Anyone

  • How to pick the best architect for your home project?

  • Singles Events Melbourne Meetups