POS Terminal

Definition

A point-of-sale (POS) terminal is a device used to accept payments at the time of a sale. Depending on its hardware and configuration, it can read chip cards, contactless cards or wallets, and magnetic-stripe cards, then send a payment request for authorization.

A terminal is not always a full POS system

A payment terminal may operate on its own or connect to business software. A wider POS system can include inventory, employee management, reporting and loyalty features; those capabilities are not built into every card terminal.

The device, software, gateway and merchant account must work together. The terminal accepts the payment credential, while the card network and issuing bank have different roles in processing and approving the transaction.

Related payment guidance

Continue with review your merchant-account setup, or return to the payments glossary.