Advantages and Disadvantages of POS Terminal
Point of sale Terminal (POS Terminal) is the point or place where a transaction occurs, which can be a store, restaurant, or online service. For smooth payments and transactions, Card Swipe Machines are used at stores to facilitate electronic commerce. Recently, PayPal launched Zettle (POS system), using which customers will make transactions at small stores in the US. As you may have noticed, the billing system uses QR codes at stores like Target and Walmart. Likewise, different stores and places where the electronic transaction occurs through POS terminal instantly. It's important to evaluate the Advantages and Disadvantages of POS Terminal to understand the pros and cons of the facility.
What are the Advantages of POS machines?
As of April 2020, 46% of in-person grocery shoppers in the US used a Credit card, 39% used debit cards, and 15% used cash. The population largely use POS terminals to pay for their purchases. In general terms, a Card Swipe Machine is called POS Terminal, which is used to collect payments from customers.
It is widely used at Malls and grocery stores, Gas stations, and other customer endpoints to offer the customer numerous benefits. The following factors ad to the advantages of POS Terminal from customers’ standpoint.
1. Instant Receipts
The Cared Swipe Machines or POS terminals are equipped with automatic bill prints, so you get a note of each transaction. The copy of bills received can be used to submit refunds from the credit card company. Also, you can keep grocery and shopping bills in hard copy to keep track of your spendings. Using Card Swipe machines also saves a lot of time at retail stores.
2. Convenience is one of the main advantages of POS Terminal
It can be very convenient when your phone is not connected to the internet to make online transactions or low on cash. Card transactions can be a very convenient mode of paying bills at gas stations and stores in these cases. So if your phone has a low battery or no internet connectivity, swiping your debit/credit card would be enough to get the payment done.
3. Go Cashless
Carrying loads of cash can be risky as well cumbersome. You can’t take a heavy wallet everywhere. While going to purchase expensive items, nobody would like the idea of counting currency standing at the payment counter. Also, in case of cash shortage, Card swipe machines can be a boon to save your time and effort. With instant cashless transactions, you do have to visit the bank or the ATMs.
The payment you make through the POS terminal is secured with a security PIN, and your transactions will proceed only upon your approval. The new chip-based cards and PoS systems are also less likely to be damaged or hacked. Companies like American Express have ramped up their security measures by introducing their chip-based cards so users can reap more advantages of POS Terminal card swipe machines.
5. Error-free Transactions
The transactions are done electronically, which means there are fewer chances of transaction failures or cancellations. Even if it's failed, it will be mentioned in the bills generated. In addition, all the invoice details are generated instantly, so there is no chance of double or duplicate duplicity or errors. You can enjoy the benefits of the Card Swipe Machine as long as you have a balance or eligible credit limit.
What are the Disadvantages of POS Terminal?
While the card swipes are very convenient, few things are to be kept in mind before using the PoS Terminal system for payments. Some of the disadvantages of Card Swipe machines can be a troublemaker for you while paying for goods or services from common to rare.
1. Major Disadvantages of POS Terminal are Connectivity Issues
Since Card Swipe Machines and other POS Terminals also need a connection to electronic identity transactions, having issues with connectivity is a common problem. A lot of times, they are not able to receive payments because of these technical glitches.
The customers can have to wait for receiving receipts as these might take some time to resolve. During the transaction, a reliable connection needs to be maintained.
2. Transaction Charges
Most of the machines issued by different companies charge 2-3% of transaction charges for the payee to receive money in their account. So with other electronic modes available free of any charges, this is not the best option to make electronic payments. Heavy bills and expenses can have a substantial amount of transaction charges in terms of processing fee or taxes.
The initial cost and replacement/Maintenance of PoS Terminal machines are very high compared to online banking or cash-based transactions. Any additional units incur a heavy initial investment apart from regular charges for making transactions. Even the upgrades demand extra expenses to be spent by the business owner. Maintenance often counts among the major disadvantages of POS Terminal.
4. Frauds and Security Concerns
POS Terminal machines are often used to capture Card details and security PINs, and these machines are at high risk of catching malware for malicious activities. Entering your PIN in front of security cameras or while someone is looking is also not advisable as it leaks your private information to those trying to take advantage of your financial details.
5. Hardware Defects and Damages
The machines are used physically, so breaking down from a fall or facing damages can be an everyday problem. In addition, if there are defects in Card Swipe machines, getting them repaired is also a tedious task. Either it takes time, or the devices need to be replaced.
Conclusion on Pros and Cons of PoS Terminal - Card Swipe Device
As far as card swiping is concerned, these machines are the only option available apart from ATM transactions. However, for relying on Digital wallets, there are many other good options to choose from. While at stores and gas stations, card transactions are helpful for anyone wishing to punch in their cards to make essential purchases; they are pretty useful when the card is the only option and withdrawing heavy cash is not the need. The machines are still widely used by grocery stores and shopping malls. If you often use card swipe machines for transactions, keeping the Pros and Cons of PoS Terminal is worthwhile.