Credit Card Reader

From LoveToKnow Creditcards

A credit card reader is a machine that reads the magnetic data strip or accesses the chip on the new smart cards.

Verifone is the highest-selling credit card reader in the US market.

How a Credit Card Reader Works

Credit cards hold their data on a magnetic strip along the bottom or top edge of the card. The magnet strip stores information exactly the same way that an audio or video tape does and the credit card reader essentially plays itself the data. The reader part sends the card data to a controller device that can perform any number of credit card processing functions, such as sending it to the credit card company to confirm that the card is legitimate and the amount is below the spending limit, printing the information on the receipt, or even converting the amount from one currency to another. (While this article is about credit cards specifically, debit cards and gift cards work just the same way, as do ATM cards.)


Purchasing a Credit Card Reader

A basic credit card reader should:

  • Have a legible display
  • Accept PINs for debit cards or credit card confirmation
  • Send data to the kind of printer you want to use
  • Have a keypad for entering data manually
  • Address verification system (make sure that the address on an ID matches that on the credit card)

You may want to consider features such as:

  • Preprogramming for your account providers (Visa card, Mastercard, American Express Credit Card, and possibly Discover Card). All machines can send data to all account providers; it's a matter of how easily.
  • Wireless capacity if you're likely to move the credit card reader around
  • Ability to attach to your computer through a USB or other port if you process online orders
  • Read drivers licenses for identity confirmation
  • Read any other data source you require in your business, such as insurance cards for a pharmacy
  • Extra sturdy keyboard if you or customers enter data on the keypad frequently
  • Bi-directional reading capacity (it can read data left to right or right to left) to save time and frustration if customers swipe their own cards
  • A tamper-evident design, especially if it is out of your direct line of sight or control
  • Ability to customize key functions
  • Ability to download data to your PC or other electronic devices
  • If it has an integrated printer, how quickly it prints receipts and how easy it is to fix printer jams

In addition, a wireless reader should:

  • Store data in its memory in case something interrupts its connections
  • Be lightweight enough to carry comfortably
  • Have an anti-slip grip on the back so it won't slide on a wet or slippery surface
  • Use rechargeable batteries
  • Have an integrated printer

You may want to consider additional features such as:

  • Using AC/DC power as well as batteries
  • Shock resistance
  • Wireless connection range

A credit card reader usually costs between $100 and $175, depending on the number of features. More advanced wireless versions can cost anywhere from $275 to $400. Leasing is rarely worthwhile.

Your credit card account provider may offer a free or very low cost terminal, but some charge considerably more than market price. Check office supply stores and online.

Security

The data is typically written on the card's magnetic strip in several different ways (redundancy), so a small scratch or other damage to the card shouldn't interfere with the credit card reader's ability to read it, but the machine can't compensate if the card data has been demagnetized or erased. A credit card reader usually has some kind of keyboard so the merchant can enter the card data manually if need be.

Because of the rise of credit card skimming machines as well as other kinds of credit card fraud, many stores are installing their credit card readers next to the customer at a check out line, so the customer is the one who swipes the card. Some restaurants are using portable readers that the server brings to the table.


 


Comments

Mark,

Typically a credit card reader does not provide address verification. If you have special needs for a credit card reader you should contact the company with which you have your merchant account. Thanks for your question.

-- Contributed by: SusanWeber

how to purchase credit card reader with address verification

-- Contributed by: mark smith

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