Insights
How the “Smart” in Smart Terminal Can Help Run Your Business
By Melody Yuan
More than just a payment processing tool—why more merchants are using smart terminals.
The way consumers shop today after the onset of COVID-19 is different from pre-pandemic days. “I haven’t used cash since 2019, and I don’t like the idea of having to give someone my card or even touching a screen to sign when I pay,” says Co Luong, senior sales manager at Irene Neuwirth. That sentiment is echoed by many: More than 50% of U.S. consumers worry about the cleanliness of touchpads, and 72% would rather skip signatures altogether. In response to this trend, research firm Markets and Markets predicts that payment processing solutions like smart terminals will grow to $120 billion by 2025.
“Everyone’s been impacted by the pandemic, and we’ve had places that were shut down for a long time and places that are now just opening up,” says Dustin Sullivan, vice president and manager of merchant sales at East West Bank. With consumer shopping preferences and behaviors changed, merchants have also had to adapt and update their technology and digital systems to accommodate.
Convenience and comfort are high priorities for today’s consumer, and offering multiple payment options whether through systems like Apple Pay or Google Wallet will be an attractive feature. “Smart terminals are going to help you through that transition,” says Disha Lal, first vice president and GTS product manager at East West Bank. “Because a good smart terminal isn’t just a card processing machine, but it’s going to help you run your entire business.”
What are smart terminals?
Beyond basic payment processing, these smart terminals can add value to businesses in many ways. Smart terminals, also known as point of sale (POS) machines, allow merchants to swipe, insert or enter debit and credit card data for faster and more convenient checkouts. Many of these terminals also allow for nearfield communication (NFC) transactions that authorize contactless tap-and-pay options.
The versatility of payment options offered by a point of sale machine allows customers to make a transaction in a variety of situations. It also allows business owners to receive and access funds more quickly.
The advancement of smart technology
“I like to use this analogy,” says Sullivan. “Remember when we had the basic home phone where the main purpose was to simply field phone calls? Now we have smartphones, and we do so many things, from browsing the internet, to using a ton of different apps to help you live a better life, right? So, think of smart terminals the same way. You’re going to want a smart terminal that’s going to take your business to a whole other level, just like smartphones have changed our lives.”
In this digital age, smart terminals have now become cloud-based software programs that provide everything from data analytics to appointment bookings. They also have the flexibility to scale for any business size and need.
“The merchant has the power to figure out which package is the best fit for them,” says Lal. “Whether it’s going for the basic system, such as starting with mobile payments and scaling up, to adding more functionalities like ordering online for curbside pickup or using interfaces that can produce various reports.”
Using smart analytics to make better business decisions
The ability to collect data and make informed business decisions is a huge advantage of the smart terminal. The selection of analytics tools and data visualization can help business owners better predict when and how to capture sales.
“Not only is it giving you data, it’s also giving you recommendations by doing things like pointing out your highest and lowest selling days and asking if you’ve considered running some additional sale on that slow selling item, or asking if you’ve considered more staffing during your highest selling hours,” says Lal. “You’re able to see the data and manage your business more effectively, which is going to save you thousands of dollars.”
Tracking the spending habits of new customers versus repeat customers can provide valuable insights into how to manage your inventory. “Perhaps you want to create a rewards program for people coming into your store,” says Sullivan. “You can ask customers to put in their phone number and reward them for every 10 purchases at your store, and all of this is powered by a smart terminal.”
Remote business management and convenience
Because smart terminals use the cloud, business owners can remotely manage finances and access a range of functionalities in real-time from any authorized device. For a retail business that may have several locations, this accessibility can save a lot of time.
“Gone are the days where you have to ask somebody from each store to pull a manual report to see what was sold for the day,” says Sullivan. “With a smart terminal, you can log in and see all of this information in one place, in real-time, and even boil it down to every sale and check the historical data by one week, one month and even one year—however long you’ve had the smart terminal system because it tracks and keeps all of that information.”
Security, a guaranteed feature
With the risk of data breaches, the need for protecting finances and consumer information is more important than ever. “I don’t think that enough business owners take safety as seriously, because it’s not just about getting fined,” says Sullivan. “If they’re actually leveraged against a breach, it could end their business.”
Payment Card Industry Data Security Standard (PCI) compliance is especially important for business owners with an online presence. This compliance is a set of operational rules and technical protocols mandated by credit card companies to ensure the security of card transactions.
“If business owners aren’t PCI compliant, they roll the dice, and it’s a yearly survey to stay compliant so some of them get complacent,” says Sullivan. With smart terminals though, PCI compliance is already built in, along with an encryption that protects data. This can provide business owners with peace of mind, simply knowing that they don’t have to worry about staying compliant on a yearly basis.
Using “smart” to your advantage
“Businesses are being disrupted by new payment technologies and are being pushed toward change, these value-added features in smart terminals enable merchants to adopt with ease,” says Lal.
Consumer purchasing trends, merchant demands and technology advancements have created a growing market for POS machines. Finding the right one for your business requires understanding your business needs, existing gaps and talking to an expert.
“We’ve seen a large increase in interest for these smart terminals over the last few years,” says Sullivan. “More merchants are seeing how this software will help power their business by streamlining and making processes more efficient across so many areas.”