What is a POS? Types of POS.

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If you are carrying out a commercial activity or just thinking to develop one, you are then interested in knowing as much as possible about how to manage sales, issue invoices, control your stock and accept card payments. All that is summed up in a concept of POS. It doesn't matter if your business is online or face-to-face, if you dedicate yourself to the restoration or you sell sneakers, you will need the best tools to make your management as reliable as possible to save time and problems.

What is POS (Point of sale terminal)? 

In the past, every business had a cash register machine that represented the financial "heart" of the company. Fortunately, much progress has been made and today we are light years away from those machines, giving priority to POS or also called Point of Sale Terminal. 

Basically POS terminal is a device that you can find at any commercial establishment. It is what allows you to pay with a card for almost any service or goods. In your business, a use of POS gives you the option to manage many other tasks in addition to accept payments: monitor the entire sales process, print invoices, update inventory stock, generate reports. In short: everything that has to do with the sales process. Today it is quite difficult to find a business that does not work with a POS, especially since we have assimilated payment by credit or debit card as the most used payment method. You also have to know that a POS is composed of software and hardware.

POS software 

It is the program for business management that contains all the relevant information. There are different types of programs, some of them are even free and downloadable online. They are more or less generic and specialized, depending on the complexity of the operations you are going to perform. 

POS hardware 

These are physical devices that support the programs: CPU, PIN Pad, touch screen, keyboard, ticket printer, barcode reader. Do you need them? It depends. If your store is physical and you need to accept face to face payments, then definitely yes. You will have to study what each bank offers you to choose the best proposal: GPRS connection, with ADSL (wireless or landline), with conventional telephone network etc. You can also access mobile applications with which you can charge (with a small cards reader) and even send invoices to your clients. This option is useful for those businesses that involve traveling and charging clients at their locations. But if your activity is exclusively online (because obviously today many businesses pass from traditional to online commercial activities), then you might be interested in knowing everything about what a virtual POS terminal is.

Virtual POS and e-commerce 

E-commerce is a reality that continues to grow and there are valid solutions for all types of online business operations. Of all the systems that you can choose for the management of your online business, you will find the greatest security in the online virtual POS terminals that operate under 3D Secure protocols. It is the one that offers the best protection of the data used in any transaction, since it encrypts the information to transmit it directly from the cardholder to the bank, without it being disclosed to the seller. 

How to apply for Virtual POS Terminal? 

The bank will be the one that makes the decision to grant you or not a virtual POS for your online store. For that the Compliance department will take you through the process of authentication to verify if your business is one hundred percent legal. Obviously, the bank is not going to support a project that is not run within legal frames, and if in doubt it will prefer to be conservative and not accept you as a client.

Typical questions that the Compliance department can ask you: 

What do you sell?: To check the nature of your proposal and make sure it is not linked in any activity involved in money laundering. At the slightest suspicion the answer will be a NO.

What is your business' average sales ticket?: The volume of transactions and its value are the factors to consider due to the fact that a virtual POS represents a credit account. If your online business is going to move significant amounts of money, the bank will require total security and therefore it will be more difficult (not impossible, if you meet the requirements) to grant you the virtual terminal. 

What are the countries where you will sell your goods and services?: The security level is not the same in all countries. Depending on the geographic breadth of your online business, the bank will evaluate the possibilities of fraud and will act accordingly.

Types of virtual POS 

What is the level of risk your business assumes? Your online store can opt for two kinds of virtual POS terminals: 

Low-risk POS terminal

Low-risk virtual POS terminal is the one most dared by banks and therefore, the one that gets authorized most frequently. Financial entities understand that there is a minimum risk of chargebacks and refunds. When a purchase is made through this system, the customer must approve the operation by entering a PIN code that the bank sends to his mobile phone at the moment. The secure protocol is known as 3D Secure (for Visa), Secure Code (for MasterCard) or Safe Key (for American Express). 

High-risk POS terminal

High risk virtual POS terminal does not run under 3D Secure protocols or other means to protect the operation against fraud. When the customer makes a purchase, there is no reinforcement security mechanism to validate the operation. For this reason it is difficult for the bank to grant this type of high-risk POS to newly registered businesses. Even so, there are online business profiles to which this system can fit. They are those that make automated payments with daily, monthly or annual periodicity (in case of direct debits), charges by telephone or directly assume a higher level of risk that compensate with a greater number of sales. 

What is your case? Do you have any doubts? We are specialists in payment methods, so you can count on us to expand your knowledge about what a POS is. Get in touch with us and we will help you!