What is a Credit Card Machine?

By Jennifer Garcia

  • Overview

    In recent years, credit cards and check cards have become wildly popular. The use of these, especially check cards, have completely changed the way people shop. More online shopping is being done and the use of cash and checks is being phased out. With the use of credit and debit cards comes the use of credit card machines. Without these machines, the use of credit and check cards would not be possible.
  • How they work

    Understanding how a credit card machine works can be a bit complex. First of all, it's attached to a phone land-line system, much like a fax machine. In fact, it functions a lot like a fax machine in that information is transmitted through the phone lines and fiber optic cables. When an individual presents his credit card as a form of payment, the card is swiped through a slot in the terminal. The information contained in that strip is transmitted via the lines and cables to the cardholder's bank for approval. If the credit card holder has sufficient credit, the transaction is approved. However, if there is not enough credit on the card, then obviously the transaction is declined.
  • Merchant Account

    The first step in understanding how a credit card machine works is to know that a merchant must first open a merchant account. The credit card industry is very competitive, so finding the proper merchant services can sometimes be a challenge. Some companies have hidden fees and use information that may be misleading in order to attract merchant customers. The best way to find a proper merchant is to do research and use that merchant's experience and reputation in order to decide which is best. In addition, take into consideration their openness regarding rates and fees. If they are guarded with this information, chances are that there are hidden fees there.


  • Accepting Credit Cards

    Once the merchant account is established, you can begin using your credit card machine to accept most major credit cards, such as American Express, Visa and MasterCard. Credit card machines may be purchased from a variety of online sites that specialize in not only setting up merchant accounts, but selling the terminals, themselves.
  • Considerations

    Though convenience and security play a big role in why merchants choose to use credit card machines, there are some factors to consider. Most importantly, if the phone line goes down, then chances are the credit card machine won't work either. If this happens, the merchant will be unable to accept credit cards. This can be a deterrent for a lot of would-be customers who do not carry any cash.
  • Benefits

    There are many benefits for merchants who use credit card machines. First of all, using the machine helps merchants keep smaller amounts of cash on hand, in case of robbery. In addition, those who use credit card machines and accept credit cards as payment attract more customers because a lot of people these days tend to use credit and debit cards, rather than carrying cash. Using cards is more convenient for a lot of consumers.
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