Understanding the Payment Terminal: Integrated vs. Semi-Integrated vs. Non-Integrated Payment Terminals

With only 17% of U.S. consumers using cash for purchases, choosing the right payment terminal for your business is more important than ever. Businesses need to streamline the entire payment process by offering customers a payment setup that’s fast and convenient for credit card transactions. At the same time, you need to address security concerns since you’ll be handling sensitive client information.

To decide which credit card terminal is right for you, it’s useful to take a close look at the different types of payment terminal setups available.

In this article, we’ll be examining fully-integrated terminals, semi-integrated terminals, and non-integrated terminals. We’ll consider the pros and cons of each and we’ll look at what you should consider before choosing a terminal for your business.

  • A Comparison of Different Payment Terminal Setups?
  • What is a Fully Integrated Terminal?
  • What is a Semi-Integrated Terminal?
  • What is a Non-Integrated Terminal?
  • What Type of Terminal is Right for You?

TL;DR

  • A payment terminal enables a merchant to take chip card and contactless payments. In the modern economic landscape, it’s essentially a requirement to have a successful business.
  • There are a variety of payment terminal brands on the market, but the place to start is by looking at the payment terminals your payment processing provider supports.
  • Your payment terminal can be fully or semi-integrated with your POS system. It’s possible to have a non-integrated system, but this is becoming increasingly less common.

TL;DR—A Quick Comparison of Different Payment Terminal Setups

If you’re looking for an at-a-glance view that compares fully integrated, semi-integrated, and non-integrated terminals, the following table has got you covered.

Fully-Integrated Semi-Integrated Non-Integrated
POS Requirements The POS and terminal are one and the same. As such, there is a 2-way sync between the devices The POS system offers One-way communication to the physical terminal. A POS system isn’t required to process payments; just a physical terminal and Internet access. *Note: If you are planning to use a POS system, it must be purchased separately.
Payment Processing Rate Card-present rate. Card-present rate. Card-present rate.
Initiating Transactions Can start transactions from either the POS or payment terminal. Can start transactions in the POS system and send to the semi-integrated terminal. Can only start transactions using the payment terminal.
Access to Data and Reports Access to real-time transactional data and rich reports from one platform. Access to real-time reporting by sending data to the terminal. No real-time reporting. Reports are limited to customers, transaction dates, and totals. Only access the most recent batch and settlement data from that day.

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What are payment terminals?

In simplest terms, payment terminals are the machines used to pay for things using credit or debit cards when you make a purchase in-person. 

When you buy something at a store and insert your chip card into a machine that uses EMV technology, that’s a payment terminal. (Previously you would swipe your magstripe card in a payment terminal. However, magstripes are no longer PCI compliant.) These days, payment terminals can also conduct contactless payments and mobile payments, like Apple Pay, via Near Field Communication (NFC) technology. 

The payment terminal reads the information on your card or from your digital wallet and helps transfer money from your account to the store’s account. These terminals are often found at cash registers in stores, restaurants, and other places where you can make purchases. 

You will often find that payment terminals are hooked up to both a POS system and a receipt printer. It’s also growing more common for the payment terminals themselves to have receipt printers built in. 

Wireless terminals are becoming increasingly common as they provide a huge amount of flexibility to the merchant to improve the customer experience. For instance, wireless terminals in restaurants enable servers to take payments right at the table, increasing security and giving patrons the option of paying with a mobile device, like their Android phone. A wireless terminal will typically hook into your credit card processing system via wifi or bluetooth.

Why do merchants need a payment terminal?

Merchants need payment terminals to make it easier for customers to pay for goods and services using credit or debit cards, and increasingly contactless payments from mobile devices. 

Instead of dealing only with cash, which can be cumbersome and sometimes risky, payment terminals allow merchants to accept card payments securely and efficiently. 

This helps businesses attract more customers and manage transactions more smoothly and quickly. Especially as so few customers even carry cash, let alone pay with it these days.

Beyond providing convenience at the point of sale and improving the customer experience, payment terminals also store transaction information electronically, creating a record of sales. This record helps merchants track their income, understand spending patterns, and manage finances effectively. By accessing these transaction records, businesses can make informed decisions, such as adjusting inventory or analyzing customer preferences, to improve overall financial performance.

Overall, payment terminals are essential tools for modern businesses to accept various forms of payment and provide convenience to their customers.

What are the top brands of payment terminals in the market?

There are a lot of payment terminals on the market. That means when it comes time to pick one, there’s a lot of information to sift through. A good starting place, though, is by looking into the payment terminal brands that your payment processing provider supports. Those terminals will, of course, be the easiest to get up and running as they will be well integrated with your credit card processing system. 

The next thing to look at would be the top brands other merchants are using. To make that easier for you, some of the most popular brands currently in use are:

  • Clover (by First Data): Clover is a popular brand known for its sleek and user-friendly payment terminals, which integrate with a range of business management tools and software.
  • Dejavoo (by IPOS Systems): The Dejavoo payment terminal is a versatile and user-friendly device designed to securely process various forms of electronic payments, providing businesses with a reliable solution for managing transactions.
  • Verifone: Verifone is a leading provider of payment terminals and solutions worldwide, offering a wide range of products tailored to different business needs.
  • Ingenico: Ingenico is another prominent brand known for its innovative payment solutions, including terminals that support various payment methods and offer advanced security features.
  • PAX Technology: PAX is a global provider of electronic payment solutions, offering a diverse range of payment terminals designed for different industries and business sizes.
  • Square: Square offers a unique ecosystem of payment solutions, including its iconic Square Terminal, which is designed for small businesses and features built-in software for managing transactions and inventory. Square Terminals, while popular, do only work with Square systems.
  • Infinite Peripherals: Infinite Peripherals offers mobile payment solutions, including POS terminals and accessories designed for use with smartphones and tablets, ideal for businesses needing flexibility in accepting payments on the go.
  • SumUp: SumUp provides affordable and easy-to-use POS terminals for small businesses, offering features such as contactless payments and integration with smartphones via Bluetooth, making it a convenient option for entrepreneurs and small merchants.

Each of these brands offers a variety of payment terminal types, like countertop and wireless, at different pricing.

When it comes to evaluating which payment terminal brand is right for you, you should: 

  • Take a look at available user reviews of any payment terminal you’re considering to get a good idea of how they truly function versus the claims the brand makes.
  • Consider the features offered by different POS terminal brands, such as security features, ease of use, and compatibility with additional software or hardware (like a bar code scanner).
  • Evaluate the reliability and reputation of the brand, looking for established companies with a track record of providing quality products and customer support.

What is a Fully-Integrated Payment Terminal?

Fully Integrated Terminals_Body Image_Web Ready

A fully-integrated payment terminal often comes in the form of an all-in-one solution that combines your point-of-sale system and card terminal into one device.

This setup eliminates the need for a separate POS and credit card machine. A fully-integrated payment terminal has a 2-way sync capability between the POS and the terminal, enabling you to process and refund payments on either device.

Pros

A fully-integrated setup means the payment app or software is downloaded directly on the terminal,  offering a fast way to process payments.

The two-way sync between your POS and credit card machine (which happens in real-time) enables you to ring up sales using either your POS or payments terminal without worrying about data loss or inaccuracies. This seamless sync between the two systems also gives you access to rich and updated payment reports.

Payment information is transmitted automatically, so there’s no need to re-enter payment amounts at the checkout counter. As such, cashiers can process sales faster, and there’s no room for human error. Plus, you reap the benefits of card-present rates.

Cons

A fully-integrated payment terminal may limit your choices when it comes to which devices and payment processors to choose. If you have a preferred POS system and want to pair it with a separate payments terminal, then a fully-integrated setup won’t work for you.

What is a Semi-Integrated Payment Terminal?

With a semi-integrated solution, your POS system is separate from your payments terminal. However, the two systems are integrated in the sense that they can “talk” to each other. The credit card terminal sends payment data to the POS system, enabling you to process and record payments easily.

This means when a customer swipes, taps, or dips their credit card using your payment terminal, the purchase amount and payment data are automatically transmitted to your POS.

Pros

Like fully-integrated payment terminals, semi-integrated payment terminals offer customers quick ways to process their payments. Transaction data like payment amounts are automatically synced between the POS and payment terminal, which reduces human error. The systems can also associate transactions to customer records or profiles.

In addition, transactions made through these terminals are considered “card-present,” which come with lower fees.

Cons

Semi-integrated payment terminals require separate devices for payments and point of sale, so the setup can be a bit clunky. You may also encounter issues with processing payments if the connection between your terminals and POS system breaks down.

The biggest disadvantage of this setup is it offers a 1-way relationship from the POS to the terminal. As such, you can only initiate payments from the POS system. Unlike with fully-integrated terminals, you can’t use the terminal on its own to start a payment independently from the POS.

What is a Non-Integrated Payment Terminal?

With a non-integrated payment terminal, the POS system and terminals are not connected.

When it comes to ringing up sales, you only need the terminal and WiFi to process payments. Your customer inserts or swipes a credit card through the terminal, sending the information for processing directly from the card reader to the payment processor.

Once the card is authorized, you can manually record the transaction into the POS or record-keeping system while a receipt is printed from the card terminal.

You don’t necessarily need a point-of-sale system with a non-integrated setup. But if you do decide to use a POS, it would have to be purchased separately.

You can see non-integrated payment terminals still being used in smaller retail stores where cashiers calculate your total on a calculator before entering it on a PIN pad. However, most modern businesses tend to use fully-integrated or semi-integrated payment terminals.

Pros

Non-integrated payment terminals offer you a very basic way for your business to accept credit cards from your customers. While they don’t communicate with your software, they do allow you to service clients who prefer to pay by card instead of in cash. You’ll also get card-present rates when using this setup.

Cons

A major disadvantage of using a non-integrated terminal is the limited reporting that it offers. Data isn’t synced in real-time, so you won’t have access to live transactional data. Instead, you’ll get the data within the next business day, once the transaction has been processed.

Accessing reports can also be cumbersome because you have to manually print out long batch reports at end of the day to see what amount will be deposited.

Additionally, non-integrated payment terminals don’t keep all of the data. They can typically retain just the most recent batch and settlements from that day. This means it would be difficult to access historical information and track trends over time. You may also need to pay extra to access a point-of-sale solution since the POS isn’t part of your terminal.

What Type of Terminal is Right For You?

So, how should you decide which payment terminal is right for you? Ultimately, this depends on the size of your business, your company’s needs, and the type of customers you serve.

Fully-integrated payment terminals offer a much faster way to process credit card payments.

Customers will appreciate this efficiency during checkout. Fully-integrated terminals also offer real-time data sync between your POS and payment device, so you can access rich reporting and live transaction data.

Semi-integrated payment terminals offer better security when processing your customer’s credit cards.

Because their card information does not enter your POS software during the transaction, you’ll enjoy more peace of mind if you’re concerned about data breaches or hacker activity. This makes semi-integrated payment terminals a great choice if you value speed and security in your credit card transactions.

Non-integrated payment terminals are becoming outdated, with an increased possibility of human error from manually recording the transaction data (such as payment amounts) into your POS system.

Nevertheless, they do offer an affordable way to accept credit cards if you don’t have to deal with a large number of clients who insist on quick checkouts.

Knowing which payment terminal provides you with the most beneficial payment solutions is vital to running a successful business.

Contact Stax today to learn more about the credit card terminals we offer and how they help your needs. Whether you’re looking for fully-integrated or semi-integrated terminals, Stax can point you in the right direction.

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FAQs about Payment Terminals

Q: What is a payment terminal and how does it work?

A payment terminal  is a device that interfaces with payment cards to make electronic funds transfers. The terminal typically reads the chip on the card or the magnetic stripe to access the data necessary to process the transaction. It then communicates with the cardholder’s bank via a telephone network or internet connection to authorize the transaction. The transaction is approved if the account has sufficient funds or credit available. Modern payment terminals may also accept contactless payments using NFC technology.

Q: What is the difference between a POS system and a payment terminal?

A POS (Point of Sale) system and a payment terminal are related but distinct components of the checkout process. A payment terminal is a device that processes card payments, interfacing directly with the customer’s payment card. A POS system, on the other hand, encompasses a broader range of functionalities, including not just the payment processing but also sales reporting, inventory management, customer management, and more. While a payment terminal is focused on the transaction aspect, a POS system provides a comprehensive solution for managing sales operations.

Q: Is a POS a terminal?

A POS is not just a terminal; it refers to the entire system used for conducting sales and processing payments. It can include hardware (such as a terminal, barcode scanner, receipt printer, and cash drawer) and software that manages the transaction process, inventory, reporting, and sometimes even customer relationships. A payment terminal can be part of a POS system as the device that handles the card payment processing.

Q: What is the difference between a terminal and a gateway?

A terminal is a physical device that allows for the swiping, dipping, or tapping of a payment card to process a transaction. It can be part of a larger POS system. A gateway, on the other hand, is a service that authorizes and processes online payments for e-commerce businesses and online retailers. It securely transmits transaction data to the payment processor or bank. While a terminal is used for in-person transactions, a gateway is used for online transactions.

Q: What is the difference between POS and virtual terminal?

The main difference between a POS system and a virtual terminal lies in their intended use and operation. A POS system is designed for in-person transactions, involving hardware for managing the entire sales process, including payment processing. It’s ideal for retail, hospitality, and restaurants where physical customer presence is typical.

A virtual terminal, on the other hand, is a software application that allows businesses to process card payments without the physical card being present. It’s typically used for telephone or mail-order transactions where the merchant manually enters payment details into an online interface. This setup is ideal for businesses that take orders over the phone or through mail order, providing flexibility for processing payments without needing the physical card or hardware terminal.