A swipe machine is an important part of the checkout process, especially in today’s cashless culture. In combination with POS systems, swipe machines can support businesses in numerous ways. In this blog, we will discuss everything you need to know about a POS swipe machine. Topics we will cover are the definition, operations and benefits of this machine.
What is a POS swipe machine?
A swipe machine is a portable device that helps businesses process payments via credit/debit cards. It can transfer money electronically from the cardholders’ accounts to the merchants’ accounts. In this way, swipe machines serve as a physical terminal for users to swipe the card. The transactional information is then authenticated for security.
This machine is often used with point of sale (POS) systems nowadays with great compatibility. Store owners usually place both systems at the checkout counter. The information processed in the swipe machine will be automatically entered into the POS system. Store owners will then use it for business management and development.
How does a swipe machine work?
Using a POS swipe machine can be easy – you swipe the card. In less than 30 seconds you can see the money is transferred into the merchant’s account. But what actually happens behind the scenes? There are 5 steps:
- Card swiped: The machine reads the card information from the magnetic stripe or chip on the back of the card. This can be the card number, security code, and expiry date.
- Data transmission: Your machine sends the card information to the payment processor through a secure network. The payment processor acts as a middleman between the merchant and the card issuer (the bank or company that issued the card).
- Information sent: The payment processor forwards the card information to the card issuer for verification. The card issuer checks if the card is valid, has enough funds, and is not reported as lost or stolen.
- Verification: The card issuer sends back a response code to the payment processor, indicating whether the transaction is approved or declined. The response code may also include a reason for the decline, for example, insufficient funds, incorrect PIN, or fraud alert.
- Completion: The payment processor relays the response code to the swipe machine, which displays it on the screen. If the transaction is approved, the machine prints a receipt for you and your customer. The money is then transferred from the card issuer to your account, usually within a few days.
Benefits of a swipe machine
Now that you know what a POS swipe machine is, it’s time to explore its benefits. Here are some of the most outstanding ones:
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Fast and (almost) error-free checkout
One of the benefits of using POS swipe machines is that they can help you keep a fast and efficient checkout process for your store. Unlike cash payments, which can take longer to count and verify, a swipe machine can process transactions in a matter of seconds. This means that you can serve more customers in less time, reduce waiting times and queues, and improve the overall customer experience. A smooth and quick checkout process can also encourage customers to return and make more purchases, thus increasing your sales and revenue.
In addition, this machine can also minimize errors at the checkout counter. Because it handles cashless payments, you can avoid thefts or mistakes when manually calculating charges, for example. Moreover, POS swipe machines can provide instant receipts and convenience to your customers, which can increase their satisfaction and loyalty.
Multiple ways of paying
With a POS swipe machine, store owners can accept multiple payment types. They can include debit/credit cards, Chip&PIN payments, or digital wallets such as Apple Pay and Google Pay. The more payment types you offer, the more convenient your customer shopping journey can become.
For example, customers who do not have cash or internet access can still pay with their cards by swiping them on the machine. This can reduce the chances of losing sales due to payment issues. Statistics show that card payments are growing in popularity and are expected to account for 75% of all transactions by 2025. Having a POS swipe machine can, hence, help you keep up with the changing customer preferences and stay ahead of the competition.
More security (over cash)
One of the common challenges that many businesses face is getting robbed of their cash on-premises. This can cause significant losses and security risks for the store owners and their employees. To avoid this problem, many businesses are switching to a POS swipe machine, which allows them to accept card payments from their customers.
Swipe machines connect to a merchant’s account, where all the incoming money is transferred into. The transactions are protected with multiple steps of verification, including PIN, OTP, or biometrics. Although cashless payments are not 100% safe, they can still minimize problems relating to cash or fraud.
An omnichannel shopping experience
POS swipe machines can also enhance the omnichannel experience of customers. This will be a big benefit for businesses nowadays, as research has shown that 45% of customers currently buy online and pick up in-store.
For example, a client has chosen to buy an item online, then pay and pick it up in-store. A POS swipe machine can take money from that customer and automatically transfer the information into the POS system. This will link to the eCommerce store and the order status can be updated. Fast, easy and consistent – you name it!
We hope that after reading this blog, you can have a better understanding of the POS swipe machine. Many POS systems nowadays support this type of card swiping device, and ConnectPOS is one of them. We take pride in building a seamless omnichannel journey for customers. If you are interested, don’t hesitate to talk to us for more information!
Source: Cloud POS