What's the Difference Between CDMA and GPRS GSM?

When our customers begin to look for an affordable wireless payment terminal, the first question they often ask is whether a device is CDMA or GPRS compatible. This is a great question, but more often than not our customers don't understand the difference, they are simply reading a requirement posed by their merchant. Since we at SaleTerminal.com believe strongly in educating our customers, we have written this short article to explain what CDMA and GPRS are and how they differ from one another.

CDMA (Code Division Multiple Access) and GPRS (General Packet Radio Services) are both wireless technologies competing against each other. GPRS is based on GSM (Global System for Mobile Communications) which is why you often hear these two mentioned in the same sentence. CDMA and GSM vary greatly in terms of technology, security, data transfer speeds, and global reach.

CDMA is the dominant standard in the United States with carriers such as Sprint and Verizon yet holds less than 20 percent of the global market; GSM technology is used by AT&T and T-mobile. CDMA uses the spread spectrum which makes the most out of the available bandwidth while GSM operates on the wedge spectrum. The difference is evident when comparing the data transfer rates. CDMA has a maximum download speed of 2 mbps while GSM only reaches 384 kbps.

Security is a major factor in wireless technologies, even more so when it comes to wireless payment terminals.CDMA offers superior security features compared to GSM. The main reason is because every user has a unique code with CDMA making it harder to detect the signal, whereas GSM signals are concentrated in the narrow bandwidth. This doesn't mean GSM technology is obsolete, it simply means CDMA offers a higher level or security.

What is an Auto Cutter for Receipt Printers?

Auto-cutters, commonly attached to receipt printers, tear receipt paper from the roll automatically for you. The  Star TSP700 Receipt Printer comes standard with this feature. When the printer reaches the end of the receipt, a signal is sent to your auto cutter that trims the receipt automatically for you at the desired length. The advantage of auto-cutters is twofold. First, Auto-cutters greatly speed up the checkout process since the receipt is torn for the cashier. Second, it improves the error rate for receipts. The auto-tear perfectly tears the receipt every time, ensuring no receipts are torn in half and preventing a second copy from having to be made.
Auto-cutters are normally contrasted with tear bars as on the  Epson TM-T88III Receipt Printer. Tear bars are a set of sharp “teeth” that lay on one side of the receipt printer. When the cashier goes to retrieve the receipt, he or she will pull down on the receipt and cut or “tear” the receipt along the teeth at the designated spot. This is the cost affordable option compared to an auto-cutter but introduces the opportunities to make mistakes.
While there are advantages and disadvantages to an auto-cutter, we here at SaleTerminal.com recommend customers use auto-cutters when they are able to do so. The speed and efficiency gains are well worth it over the marginally higher costs.

To Debit or to Credit, That is the Question

Before you checkout at any local grocery store you'll be asked whether you want to pay via debit or credit, nobody uses those green bills anymore.Your choice of payment is one that benefits you as the customer, maybe you'll earn points or maybe it doesn't matter to you.Well, my weekend trip to the grocery store got me wondering how debit and credit payments affect the merchant, and if the merchant benefits more from one than the other.

Processing Fees

Visa and MasterCard:

When a Visa or MasterCard transaction occurs there are four parties involved...

1. The cardholder (the customer or purchaser)
2. The issuer (the financial institution that issued the credit card to the cardholder)
3. The merchant (the person or business selling a product or service)
4. The acquirer (the merchant's financial institution)

American Express and Discover:

When an American Express or Discover transaction occurs there are three parties involved...

1. The cardholder
2. The merchant
3. The credit card company (American Express and Discover act as both the issuer and the acquirer)

When you or any business decides to accept credit and debit cards as forms of payment you must first negotiate what is called a "merchant discount fee" with your financial institution, the acquirer. The merchant discount fee is deducted from each transaction when a customer uses a credit or debit card to pay.In the case of American Express and Discover, you negotiate this fee directly with them since they act as the financial institution and credit card company.A large part of the merchant discount fee is the "interchange transaction fee" which is paid to the credit or debit card issuer (the customer's financial institution) by the acquirer.The fee rates vary depending on certain factors which we will explain below.

Credit Card Interchange Fee Rates

The four main factors for determining a merchant's interchange fee rates are listed below.These factors only apply to Visa and MasterCard because American Express and Discover do not disclose how their rates are determined.

1. Card Type (Premium cards or those offering rewards normally have higher rates than standard credit cards)
2. Industry or Category (Industries that do not process many credit cards have lower rates than those who process many credit cards)
3. Size (More transactions mean lower rates)
4. Processing Type (Transactions via the internet have higher rates than those where the credit card is present due to an increased chance of fraud)

Debit Card Transactions

Just like credit card transactions, a merchant must also negotiate a discount fee for processing debit cards.However, the interchange rates are often lower for debit cards than credit cards since the funds are immediately removed from the cardholder's account.Since the issuer is receiving a smaller amount for debit card transactions than credit cards, they sometimes charge the cardholder a fee every time the debit card is used.Or, the issuer may require the cardholder to make a minimum number of debit purchases each month otherwise a fee will be imposed.The issuer prefers their cardholders to pay via credit card in order to receive a higher fee from the acquirer, which ultimately comes out of the merchants pocket.

Final note, Debit or Credit?

In 2014, customers prefer the convenience of paying with debit and credit cards, that's a fact.Staying in business and increasing sales means following the trends.It's important you research all the options to find the lowest rates but what is more beneficial for you the merchant, accepting debit or credit?Debit cards, this is because the rates are lower since the money is withdrawn directly from the cardholder's account.

PCI Compliance -- What It Is and Why It's Important

Any merchant who accepts credit and debit cards as a form of payment must adhere to certain regulations.These regulations are overseen by the PCI (payment card industry) Security Standards Council.The PCI SSC was founded by the major credit card companies American Express, Discover, JCB, MasterCard, and Visa.The PCI SSC is an open global forum for the ongoing development, enhancement, storage, dissemination and implementation of security standards for account data protection ( https://www.pcisecuritystandards.org).
PCI Security Standards are the requirements set forth by the PCI SSC.These standards are created to protect the cardholder’s information.Although the council creates and manages the standards/regulations, it’s the individual credit card company that actually enforces compliance.
As mentioned in the beginning of this article, any merchant who accepts payment cards must adhere to the PCI Security Standards.To find out what your compliance requirements are you must contact the financial institution you are affiliated with.This would be the bank you have your merchant account through and/or American Express and Discover.

Important Links

• PCI Security Standards Council
• Discover Financial Services
• JCB International
• MasterCard
• Visa Inc
• Visa Europe

How Do Mobile and Wireless Credit Card Terminals Work?

Wireless terminals allow merchants to cut the cord when processing credit cards. These mobile devices have revolutionized taking payments when no phone line or corded Internet connection is available. Many merchants are wary of using these payment terminals as they are not sure how they work.
When you process a credit card with a wireless terminal, the terminal will take the customer’s card information and payment information as usual, but instead of sending it through a wireless, the terminal will broadcast this information wirelessly to the nearest cell phone tower. These signals can be sent in one of two methords, GPRS or CDMA. Depending on your merchant account and service company, you’ll want to use one the correct technology. CDMA generally used Sprint or Verizon’s towers while GPRS is designed for T-Mobile and AT&T.

Mobile credit card processing is secure. Special technology has been built into these units called encryption to protect customer’s information from being compromised. Encryption means when the payment information is sent out wireless, it is sent scrambled up in a mess of useless information to anyone who does not have the encryption key. This key, which only your merchant processor has, allows your payment to be deciphered into an understandable format so payment can be processed.
These mobile terminals can also come with other handy features such as the ability to store up to 250 transactions locally on the terminal even when no cellular signal is available. So even if you’re out in the middle of nowhere at a renaissance faire, you can process the payment for turkey legs or swords.
SaleTerminal.com has a wide range of wireless and mobile credit card terminals available such as the Verifone VX610. For a whole range of terminals, please visit our webstore.

Can I Own My Own Credit Card Terminal?

Yes, you can own your own credit card terminal!

Many times we get the question “Can I own my own terminal?” from companies just starting out. The answer will often surprise them; YES, you can in fact own your own payment terminal. If you purchase or own a compatible terminal for your payment processing company, your merchant processing company will “inject” the terminal with the correct software for a small fee.
By purchasing a credit card terminal, companies free themselves from costly leases that can add an additional 20% interest above the cost of the terminal itself. Budget conscious store owners should also consider refurbished payment terminals as a way to save additional money when opening up a store.
Do not get trapped into thinking the only way to set up your merchant account is to lease or buy a terminal direct from your provider. Contact SaleTerminal.com for a quote on your payment terminal today!