What is a POS Machine?

What is a POS Machine?

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POS Machine

A Point of Sale (POS) machine is sophisticated electronic equipment that processes payments made by credit card and debit card seamlessly. This machine is commonly known as a card swipe machine.

Functions

  • The machine is embedded with a magnetic strip that reads the data stored on the credit or debit card – most importantly the name of the card holder, the number on the card, and the expiry date;
  • It checks adequacy of available limit, in case of a credit card, and balance in the bank account linked to a debit card;
  • When a debit card is presented, the balance is transferred from the purchaser’s account to the seller’s account.
  • In case of a credit card, the POS machine records the transaction with the credit card company. The amount is, thereafter, claimed by the merchant establishment from the credit card company;
  • A receipt with details of the transaction is printed and the change to be returned to the customer is displayed;
  • A state of the art POS machine will also have the ability to manage inventory and perform analysis of sales.

Hardware

The basic requirements are a computer, display terminal, magnetic strip reader, cash drawer, bar code scanner, and printer. Add ons could include a weighing scale, a pad for customers to enter PIN codes and even a screen to record customer signatures.

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Randolph Rowe is a professional banker and former General Manager of Small Industries Development Bank of India (SIDBI). He brings with him the wealth of 34 years of all-round experience in the banking sector - comprising 12 years with IDBI and 22 years with SIDBI - which he combines with his flair for writing.

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1 COMMENT

  1. POS is a point of scale machine is being used in almost all the kind of business where you can do the payment either by credit card or debit card just in one swipe. It helps a lot even though we don’t have money in hand it could be paid by card,no tension of losing money right?

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