A point-of-sale (POS) terminal is an electronic device used by businesses to process payment transactions from credit cards, debit cards and individual checking accounts. This type of terminal often uses a combination of a computer, a bar code reader, an optical scanner and a magnetic strip reader as well as a cash register to process customers' credit information. After a customer’s credit card or debit card is swiped through the magnetic strip reader during checkout, the total purchase amount is usually transferred directly to the seller’s account. Some POS terminals capture and store customer information for processing at a later time by a central computer.
Many large and small retailers use POS terminals to process their daily sales transactions. POS terminals are often used by grocery stores, convenience stores and department stores. Some non-retailers, such as insurance companies, hospitals, and restaurants, also use POS terminals to process electronic payment transactions. In addition, these payment systems are also used by Internet retailers to process electronic commerce sales transactions.
Generally, the owner of an electronic commerce website does not need to lease a POS terminal to process customer orders. Internet retailers can often use a merchant account or online payment vendor to accept and process credit card payments online. Most Internet merchant account packages feature an Internet payment gateway, shopping cart and a virtual POS terminal. A virtual terminal usually also allows retailers to accept credit card orders over the phone.
Standard interchange language (SIL) is computer software that allows for the interchange of data between the direct store delivery and point-of-sale software programs. Direct store delivery software is often used by retailers to track store deliveries. SIL language often aids in the process of information used in the completion of electronic transactions by the POS terminal. The language was created by the food and grocery industry in 1991 to help retailers manage their payment and order systems more efficiently.
For years after the POS terminal was first introduced in 1979, customers often still had to line up at the checkout counter to pay for their goods. In 1992, some stores installed self-checkout terminals in an effort to speed up the checkout and payment process for customers. Generally, self-checkout terminals allow customers to purchase their goods faster without waiting in line. Most self-checkout terminals often feature a barcode scanner, weight scale and credit card reader. Typically, self-checkout terminals are used by shoppers who purchase a small number of items.