A typical POS (Point of Sale ) terminal has built-in devices for reading smart-cards (microchip) and magnetic strip ,key board with a built in PIN PAD,a printer ,a port for connection with a PC or with a electronic cash register(ECR).Besides usually the POS terminal is equipped with a modem with a capability to dial to the NAC(Network Access Controller) at Data Center of the Bank.
Modern POS terminal have GPRS functionality ,thus instead of modem it contains a SIM card for connection with the data center using mobile connectivity.Thus this type of POS terminal is movable.To support the mobility of the POS terminal ,it has been provided with a battery for supplying power during transactions.The advantages of the GPRS POS terminals are as follows:
1.The merchant does not require a PSTN connection for use of the POS terminal
2.The customer does not require to handover the card to the bearer which can lead the card to be duplicated.
3.In case of debit card ,the customer does not require to come to the cash counter for insertion of this PIN at the PIN PAD of the POS terminal
4.It can be used by a small floating shops who sales the goods in different places such as residences ,parks,rail stations etc.
Banks buy a POS and supply to the merchant free of cost but at an agreed merchant commission.The merchant commission refers to the commission in percentage over the sale amount settled using the supplied POS terminal which the merchant pay to the bank.This normally rages from 1.5% to 3%.As per the agreement a merchant should not charge the customer for the commission amount.If a merchant do so,the bank has the right to withdraw the POS terminal from the merchant.
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