Information on Merchant Accounts,
Ecommerce and Credit Card Processing

May 11th, 2007 by Jamie Estep

What credit card terminal should you use?

Filed in: Credit Card Equipment, Merchant Accounts | 3 comments

There are about thirty credit card terminals that are currently being used for credit card processing in the United States. Of these, about five make up 90% of the terminals currently being distributed in the country.

Business owners are often told that they need some specific terminal, when in reality they are being sold something much more advanced and more expensive than they will ever need.

A few misconceptions

  • Terminals must be purchased from the company you are going to process with.
  • You should always buy the most recent, advanced terminal you can afford.
  • Terminals are expensive.

Terminals must be purchased from the company you are going to process with.

This is only true when you process with a company that has their own proprietary equipment, or one that must make a huge profit from equipment sales. The majority of processors support a wide variety of terminals from different manufacturers. I personally recommend staying away from companies that use only proprietary terminals, or ones that force you to buy excessively marked-up equipment from them. Also, free terminal programs use proprietary equipment, but this is so they can protect their investment in the equipment, and the proprietary equipment rule doesn’t apply the same to this situation.

You should always buy the most recent, advanced terminal you can afford.

This is far from the truth. While some new terminals offer additional features like WiFi, or Internet (IP Based) processing, older terminal models are generally more reliable and much cheaper than the newer terminals. The more features a terminal has, the more complicated it is to use. I can’t count how many businesses I know that still use an old Tranz 330 and P 250 combination and have no intention of switching until the last possible second. Newer is not always better.

Terminals are expensive.

There are a number of terminals that are under $200, and even advanced terminals are normally under $500 if you buy them from the right place. If you were offered some terminal for a thousand dollars, it was most likely from a company that is trying to make a huge profit from their equipment sales. You will usually see this price right before you are offered a lease. There isn’t a single terminal that is available directly to businesses that costs over a thousand dollars. Not even a wireless terminal. Do a search on Google for the terminal you are being offered and you will quickly find what it is actually worth.

So, which terminal?

Since the ability to process over an IP connection became a very desired option, I classify terminals into three categories, Land-line, Ethernet compatible, and Wireless.

For most businesses I recommend a Nurit 2085, or Hypercom T7 Plus, or Omni 3730LE / VX510LE (if your processor supports it, 3730 is better supported and costs ~$250). These terminals are all easy to use, very reliable, and cheap (<$200). The Nurit can handle multiple merchant accounts, and all have thermal printers. You wont have the ability to process over an IP connection with these, but all support additional peripherals like pinpads, smart card readers, or check scanners. Most small retail businesses will be perfectly content using one of these lower cost terminals.

If you don’t want to use up a phone line, are planning on switching your business services to the internet, or you already have a broadband internet connection and a router / switch, then an Ethernet compatible terminal is probably going to be your best bet. Currently the VX570 Ethernet has by far the best support for IP processing, but the Nurit 8400, and the Hypercom T4220 are also becoming more supported. These terminals will cost from $300 – $500 with Ethernet compatibility (about $100 less for land-line only). You should be absolutely sure that your provider supports the terminal you are interested in for IP processing before you go to purchase one. Many processors do not yet support the Nurit’s or Hypercom’s for IP processing, but almost all support the VX.

These terminals all have a built in pinpad for PIN debit processing. (The entire terminal needs to be encrypted with your processor before you can use PIN debit with it.) All terminals have a thermal printer and the VX570 and Hypercom T4220 come standard with a smart card reader.

These terminals are about as technologically advanced as any retail business will need at the present time.

Wireless terminals have advanced a long way in the past five years, and their price has dropped dramatically. Wireless terminals can be easily found between $500 and $700. My personal favorite is the Nurit 8020 GPRS, but the Way Systems terminals are coming in at a close second. There aren’t many options for wireless terminal. The Nurit 8000 is really the only well supported full-featured terminal, and the rest of the market is between the smaller wireless specific equipment manufacturers (Way Systems, Comstar, eProcessing Network, etc.). A new company called Dejavoo has introduced a very promising terminal, the Dejavoo M8, which looks to be a solid contender in the wireless markets.
Be careful when you do go to purchase a wireless terminal, especially if you decide to buy one from a company that you don’t have history with. Take a look at: How to safely Purchase a Wireless Credit Card Terminal to ensure that you aren’t buying something that you don’t want.

Other than these, I can’t recommend any other terminal except for some specific business related circumstances. One of these terminals should fit the needs of almost every business that will need a credit card terminal. You should definitely be planning for the future when you purchase a terminal, but just because a salesman said you need some advanced terminal, doesn’t always mean it’s true.

Some related reading:
Verifone Omni Ethernet and IP Network Setup

3 Responses to “What credit card terminal should you use?”

  1. Dale May 13, 2007 at 3:46 pm

    Thank you for providing all this valuable information! We’re just getting started, and almost made the mistake of leasing a far-too-expensive machine.

  2. whisky May 14, 2007 at 12:54 pm

    I started a small online business recently using a terminal for online payments.I used the internet seeking out the best information and advice before starting an online processing company based sales advertisement.I found a great difference in price between terminal providers, for instance i found a great offer fro new clients which offered me a great reduction in rate fees.
    I would strongly recommend shopping around before making your final decision.

  3. Janni March 20, 2008 at 7:07 pm

    Thats a very detailed information for merchants thanks for helping the newbies.