Learn The Difference Between a ATM Machine & a Debit Machine?

There are many different products available in today’s markets that allow consumer’s to pay for their purchases electronically.  However, there are still some businesses that exist on cash alone.   It is very rare to go into a business or obtain a service and find out there is no Debit Machine or better known as the POS (Point of Sale) Terminal at the checkout.  Sometimes, the merchant will have an ATM Machine on site, so that they never have to turn down a potential sale.  So why do the two machines, that complete the same task/function co exist??

Just as many differences between ATM’s and Debit Machines exist as similarities between the two.

When a merchant has an ATM Machine, they are not accepting the transaction electronically.  In the instance of an ATM, the customer is simply going into their account and withdrawing cash to make a purchase.  Whether it’s using a debit card which draws funds from your bank account, or a credit card that is allowing you to forward credit in the form of cash, you are essentially getting cash to pay the merchant.  This is the exact equivalent of using a bank machine.  Usually there is a surcharge, higher than or at par with what the Bank’s are charging for transaction fee’s.  Whoever owns the ATM Machine makes the profit from surcharges.  The most common place you will see ATM Machines, is late night businesses or businesses that’s location are far away from banks.  Also in a setting like fairs, flea markets or large vendor shows, casino’s,  where merchant’s do not have permanent retail frontage; the cost of having a pos may not be realistic for the part time business so having a ATM on site helps developers and organizers assure to the merchant’s that customer’s will have easy access to cash.

When utilizing the Debit Terminal, the processing of the transactions goes directly to the merchant’s business account.  There is no cash exchange or need to provide cash when a merchant has a Debit Terminal.  Essentially, the terminal comes with the potential to accept all major credit cards and interact transactions.  The customer simply swipes directly into the terminal, and the transaction is processed.  Much like an ATM Machine; the Debit Terminals that many ISO’s offer on market today, can be programmed to distribute “cash back”. The merchant would charge the customer to grant Cash Back and there fore has the potential to see profit from having this added convenience available to their customers!  Now, since the transactions and processing is directly linked to the merchant’s business account, the risk associated with accepting credit cards as a method of payment is also linked to the merchant.

It is more of a commitment let’s say, to own and have a Debit Terminal as opposed to an ATM Machine, but the benefit’s of the Debit Terminal far outweigh the ATM Machine, and the number one reason I think a Debit Terminal is better for the merchant than at ATM Machine is this:  when a merchant has a Debit Terminal, they always get the sale.

Without the Debit Machine ready to go at that check out point, a merchant or vendor is creating the risk of giving the customer a chance to walk away from that purchase: right at the point of sale.  The numbers of customers who do not come back and make that purchase create lost business.  That lost business will cost the merchant far more than the cost of having the Debit Terminal on site.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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