3 Reasons A Desktop Credit Card Terminal Is A Poor Merchant Solution

Last week I visited multiple merchants that sell products and services  business to business, most of them whom never see their customers. They all had desktop terminals.


The FD100ti by First Data is a good quality retail terminal, but I wouldn’t recommend for business to business, card not present merchants.

3 Reasons A Desktop Credit Card Terminal Is A Bad Solution For Business To Business Merchants

  1. PROFITS REDUCED: It doesn’t support level III processing, critical for business to business merchants to save money on merchant fees.
  2. INCREASES RISK: It cannot store and tokenize credit card numbers for repeat billing so either card data is stored on paper forms or employees get the number over and over again, either way exposing the card number repeatedly.
  3. INEFFICIENT:  Employees have to key enter full card data every time for repeat customers; data records are limited to whomever has access to accounting software, or waits for reports to be generated and disseminated.

Tip: There are no desktop terminals that support level III processing. Merchants need a virtual terminal or integrated payment solution that supports level III processing.

3D Merchant Services Powered by CenPOS
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OpenBravo POS terminals with signature capture

Looking to use signature capture devices with your OpenBravo POS? Ingenico and Equinox terminals are compatible with our integrated payment gateway.

equinox L5200 signature capture terminal

Equinox L5200 is a feature rich signature capture terminal among the lowest cost and high reliability. Equinox was formerly known as Hypercom, the number one terminal brand in US.

ingenico isc350 signature capture

The Ingenico isc350 has a large glass screen and bigger footprint than other units. Stand with angled base is recommended.

  • Ingenico touch ISC 250
  • Ingenico touch ISC 350
  • Equinox L5200
  • Equinox L5300

Older products supported but end of life has been announced include the Ingenico i6580, Ingenico i3070, Hypercom Optimum L4250, Verifone Pin Pad 1000se. Other compatible options include Magnetic Card Swipe reader and mobile card readers.

Virtual Terminal Compatible with Signature Capture devices: Multichannel vendor selection checklist

signature capture payment gateway solutions

Moving your POS to the cloud? Many payment gateways have been adapted to work with more sales channels, while others were built for omnichannel needs from inception. Often, less sophisticated gateways accept mobile payments, but do not support signature capture terminals with pin debit. For those that support signature capture terminals with pin debit, here’s a checklist of vendor selection criteria to help distinguish between payment gateways: POS Services required:

  • Merchant Account
  • Payment Gateway & Virtual Terminal

Vendor Selection Checklist:

    Product Features

  • How will the gateway help manage interchange fees? (impacts EBTIDA)
  • Does the gateway support level 3 data? (impacts EBTIDA)
  • Does the gateway support signature capture terminals with pin debit?
  • How do merchants manage multi-location store settings such as user access, user permissions, and fraud prevention settings? (impacts efficiencies, EBIDTA, PCI Compliance)
  • How do merchants manage user logins for multi-location operations? (impacts efficiencies)
  • How frequently does the gateway roll out new services or features? (impacts efficiencies, EBIDTA, PCI Compliance)
  • How does the gateway help prevent internal & external fraud?
  • Product Support
    • With what methods can merchants contact support? Hours of operation?
  • Scalability
    • What is process for adding additional locations?
    • How easy is it to update all locations with new or changed user permissions or store settings?
  • Flexibility
    • How are operations disrupted when the retailer changes merchant account processors in the future?
    • With what frequency does the vendor roll out new platform updates?
  • Experience
    • What is the vendor experience with multichannel / multi-location operations, using similar hardware and software?
    • ROI
      • Hard Costs
      • Efficiencies
      • Reduced losses
  • Payment Gateway Services required
    • Does the gateway support all current sales channels?
    • Will the gateway support future anticipated sales channels?

    For answers to these questions by payment gateway, contact us for more details.

Multichannel Sales Initiatives – Are consultants too self serving?

According to the 24th annual Retail Info Systems technology study, expanding multichannel initiatives is the biggest action item over the next 18 months, followed by a mobile enterprise / store strategy and security. 2014 and 2015 are expected to be years of hyper innovation and with the EMV October 2015 deadline looming, CIO’s and IT are right in the thick of it.

2014 Retail Technology Study

Data excerpt from the 2014 Gartner Research 24th Annual Retail Technology Study: Major Action Items Over the Next 18 Months. To get the study, go here http://risnews.edgl.com/retail-research.

For merchants, checking with peers and current vendors about potential partner solutions may be inadequate. The stakes are extremely high for many of the parties that hope to capitalize on the huge investment companies will be making. Whether they have the best product or not- or even a working product- many vendors will serve their best interests first.

For example, a prospective customer was very interested in my omni-channel payment gateway and wanted to check with his current merchant processor, one of the top three largest US processors, for his input. The current vendor knew nothing about my product but concluded after a 10 minute conversation there was little value in a product like mine (no price was discussed) and would relay that to his customer. He completely dismissed there was any value in:

  • Eliminating stored credit card numbers on paper forms
  • Using tokens to recharge customers in a few clicks vs key entering every time
  • Level 3 Processing (100% B2B merchant)
  • One reporting system for all payment sources (reducing PCI burden and creating back office efficiencies for research, reports and reconciliation)

The consultant concluded that if the customer wanted to change, he had a ‘similar’ product, though admittedly not as good, nor comprehensive enough to address all the customer needs. In other words, the guy was too lazy to help the customer before, but if pressed, he was willing to sell him an inferior product. Worse, he completely failed to recognize that his own customer did place value on solving business problems.

In conclusion, so many vendors have ‘a product’ to sell in which they have a vested interest, that they will readily dismiss anything they can’t make money on. Consultants are often getting their information from the same sources so they just don’t know any better. CIO’s might be better off seeking experts outside of their current vendor resources to find the best solution for multichannel initiatives.

What payment gateways support level 3 processing?

level 3 payment gateway chart

2014 level 3 payment gateway comparison chart. Click image for PDF.

2014 comparison chart review of payment gateways that support level III data and whether or not the gateway is independent of the merchant account. Reviewed are authorize.net, CenPOS, Paymentech Orbital, First Data e4 Global Gateway, PayTrace, Payflow Pro, 3Delta Systems (3DSI), Paymentech Orbital, and Heartland Payment Systems.

Where a check is indicated, the merchant can send level III data without any special programming or integration (except API).  However, a merchant might achieve level 3 processing in another category by using an API.

The payment channels reviewed include retail, moto, ecommerce shopping cart, electronic bill presentment & payment (EBPP), online payments (hosted web pay page), token billing (recurring), API (ERP and other software). Also indicated is whether a new merchant account is required or which merchant processors the gateway is compatible with.

2014 Level 3 Processing Omnichannel Payment Gateway Comparison Chart PDF download 1.1 MB

Certification to merchant processors, including level 3 processing:

  • CenPOS: First Data (FDC Nashville), Chase Paymentech, Vantiv, TYSYS*
  • authorize.net: Chase Paymentech, FDC Compass, FDC Nashville Global , GPN, Litle, RBS WorldPay Atlanta, TSYS
  • Payflow Pro: Cielo, First Data (FDMS), Heartland, Litle, Paymentech Salem, Paymentech Tampa, Securenet, TYSYS
  • Paytrace: TSYS, Paymentech Tampa, Global East, Heartland, and Trident.

* Think of TYSYS as a hub that provides access for transactions (traffic via payment gateway) to many highways (processors). By going through the hub, a payment gateway can securely connect to many processors (Global, Heartland, First Data etc) with one certification. Some merchants may incur a per transaction fee for using a payment gateway that connects via TYSYS; this may or may not be additional to fees already being paid.


** January 2014 Authorize.net update http://apps.cybersource.com/library/documentation/dev_guides/Level_2_3_SO_API/Level_II_III_SO_API.pdf (pg 10)

*** 2/28/2014 Payflow Pro https://www.paypalobjects.com/webstatic/en_US/developer/docs/pdf/payflowgateway_guide.pdf

DISCLAIMER: If the information was unclear or not available, the field was left blank to err on the side of caution. Contact processors or payment gateway providers for specific details about availability and functionality. 3D Merchant Services is an authorized reseller for authorize.net and CenPOS, in addition to other services.


MOTO: mail order, telephone order. This is a transaction indicator code for card not present transactions.

EBPP: electronic bill presentment & payment. A merchant delivers an electronic invoice to their customers. The customer then pays the invoice electronically.

LEVEL III data or level 3 data:  refers to the additional field data sent for processing Visa and MasterCard business, corporate and purchasing cards.

LEVEL III data or level 3 processing: refers to a merchant account that supports the acceptance of level 3 data and passes the data onto the issuers

What’s the difference between level 3 and level III? Nothing. In 2014, and recent documents, interchange rates are more frequently referred to as level 3. However, in older documentation and marketing materials, the requirements and other items referred to it as level III.

It’s critical to note that the CAPABILITY of sending level 3 data via a payment gateway, does NOT guarantee that the transaction will qualify for level 3 interchange rates. There are many rules, and how the gateway helps a merchant meet those rules varies widely. For a free consultation on key operational differences between level III gateways, contact us.

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