| f Sale (POS) systems are the devices that are used | | | | issuing bank and either approves or declines the |
| by retailers, restaurants and other merchants to | | | | transaction. Till recently, many POS systems routinely |
| carry out a credit card or cash transaction. Till the | | | | stored cardholder and transaction data for handling |
| early 1990’s, the term Point of Sale system | | | | issues such as refunds and charge backs. However |
| referred largely to the Electronic Cash Registers used | | | | major credit card companies such as MasterCard, |
| by cashiers at checkout counters and payment | | | | American Express and Visa have now prohibited |
| kiosks to conduct transactions. Over the past two | | | | merchants from storing any credit card data on POS |
| decades or so, POS systems have evolved | | | | because of fears the data could be stolen and |
| considerably and are no longer just standalone | | | | misused by computer hackers. The same fears have |
| payment terminals. Most POS systems in use by | | | | also prompted new credit card rules that require all |
| retailers and other merchants these days are | | | | POS systems in future to support functions for |
| network connected and capable of carrying out | | | | encrypting card holder data before it is transmitted |
| secure payment card transactions in milliseconds. | | | | to back-end systems. |
| Modern POS systems are full-fledged Windows or | | | | Though most POS systems provide more or less the |
| Linux-based computers featuring their own | | | | same functions, the devices are often configured |
| processing and storage capabilities, networking | | | | differently for different environments. For instance, |
| support and user-friendly interfaces for carrying out | | | | POS terminals used by restaurants are almost always |
| transactions. | | | | touch-screen or wireless-enabled. Most restaurants |
| Almost all modern POS systems are also | | | | and fast-food chains often customize their POS |
| Web-enabled and can be remotely accessed, | | | | systems in order to be able to relay orders to the |
| administered and managed. They also integrate | | | | kitchen, in addition to handing payment transactions. |
| considerably more functionality than previous | | | | Many POS systems are also unattended. Examples of |
| generation cash registers. With few exceptions, POS | | | | such systems include POS terminaks at parking |
| systems these days can handle not just payment | | | | garages and gas station pumps. |
| transactions, but also refunds, exchanges, | | | | Almost all POS systems that are currently in use in |
| promotional sales transactions and transactions | | | | the U.S. work only with magnetic stripe cards. |
| involving cash, checks or gift cards. | | | | However, POS systems in many other regions in the |
| POS systems are generally considered just the | | | | world also support a relatively new type of |
| high-speed front-end’ of the payment | | | | technology called Chip and PIN. The term Chip and |
| chain. When a payment card is swiped through a POS | | | | PIN refers to a new generation of credit cards that |
| system, it reads the cardholder data, such as account | | | | use an integrated microprocessor, rather than a |
| number, cardholder name and other details, from the | | | | magnetic stripe, for storing cardholder data. The |
| magnetic stripe on the back of each card. That | | | | technology is considered relatively more secure that |
| information is then sent to a backend system which | | | | magnetic stripe technology, but requires specialized |
| in turn forwards it over a high-speed network to a | | | | POS terminals that are capable of reading data from |
| payment processor. The payment processor then | | | | chips rather than magnetic stripes. Moving to the |
| verifies the transaction with the cardholder’s | | | | technology in the U. |