The POS terminal

Every business that accepts a credit card has a POS terminal. You can’t really accept a card without one nowadays anyway. Much of our modern technology that we know today has its roots in the 1970s and 1980s and the POS terminal is no different.

The credit card imprinter had revolutionized the way credit card payments were handled. It was only logical that the next step was into the electronic realm. Electronic authorization was available to merchants long before the 1980s as a merchant could call a credit card issuer, who would then look up that person’s worthiness and either authorize the transaction or decline it. Due to the time it took to complete this process many merchants only chose to use this route on high dollar transactions.

Both Visa and MasterCharge were working on the next step. Visa was the first to release an electronic terminal in 1979. Like the computers and portable telephones of the day it was bulky. MasterCharge was not far behind and released their version that same year and was the first to use magnetic stripes.

A thirty year old technology in magnetic stripes were used to store information on the cards for the terminals to read. Electronics had been introduced to payment processing in 1971 allowing a merchant to phone in the transactions, a process that could take five minutes or more to complete. Many chose to use the manual imprinter to take the transaction and speed the process along so they could keep the line moving and some merchants were most certainly taken advantage of by criminals.

The new technology worked. Within five years three competitors, VeriFone and Ingenico in 1980 and Hypercom in 1982 entered the market. VeriFone’s ZON series terminal is considered to be the first modern EFTPOS terminal and are still on the market to this day. Hypercom’s T7P terminal has also been one of the bestselling terminals on the market. An Israeli company, Lipman, entered the market in 1994 and has had roughly a 10% market share but was a pioneer in wireless terminals, having at one point 95% of the wireless market with their Nurit series terminals. VeriFone, which purchased Hypercom in 2011, has the largest market share with at one point in 2015 controlling 80% of the market.

The time it took to complete a transaction went from several minutes to about 90 seconds. As the technology improved the devices got smaller and more powerful paving the way for the next advancement in technology, some of which is already being integrated like biotechnology or contactless payment. Who knows what the future will hold?