| Historically, merchants serving various markets such as | | | | Today, electronic payment processing software can |
| retail stores, medical offices, veterinary clinics, auto | | | | replace all of these dedicated devices. A single |
| repair shops, and others have accepted electronic | | | | streamlined user interface provides the merchant with |
| payments through a dedicated terminal device. These | | | | a user friendly screen that supports all of the various |
| devices consisted of a magnetic strip reader, LED | | | | transaction types. Training is much more efficient as |
| display, and modem. Credit card terminals transmit the | | | | employees no longer have to learn different interfaces. |
| credit card number and purchase amount to large | | | | Customer satisfaction levels increase as average wait |
| banking computers which verify available credit limits | | | | time in lines are reduced due to faster communications. |
| and return either an approval or decline message to | | | | Electronic payment processing software is capable of |
| the credit card terminal. If a transaction is approved, | | | | bypassing traditional phone lines and communicates |
| the Open To Buy amount on the credit card is | | | | over faster internet connections. This results in |
| decreased, the merchant bank account is credited with | | | | instantaneous approvals versus the traditional 20-30 |
| the purchase amount, and the card holder is billed for | | | | second wait time for modem connections on the |
| the purchase. | | | | dedicated devices. |
| Although electronic payments have been a benefit for | | | | Another recent development of electronic payment |
| merchants and consumers, it comes with additional | | | | processing software is the ability to interface with |
| costs. Merchants pay a fee on each transaction for | | | | vertical software applications. This feature allows a |
| the privilege of accepting credit cards. Hard costs | | | | merchant to concentrate training efforts on the core |
| include equipment purchases, phone lines, supplies, | | | | software application used to manage their business. |
| fraud, time value of money for impounds, and fees. | | | | Payments become just another part of the process in |
| Soft costs include training, regulatory compliance, | | | | operating the software and serving the customer. |
| payment errors, and customer satisfaction rates. | | | | Customer satisfaction levels improve through more |
| The introduction of additional electronic payment types | | | | efficient and faster check outs. Rather than two |
| has compounded the costs of accepting these | | | | receiving two receipts (one for purchases, one for |
| payments. New equipment and training are often | | | | payment) a single invoice includes both the transaction |
| required to accept debit cards, perform check | | | | and payment information. Merchant costs are reduced |
| guarantee services, and issue/redeem gift cards. The | | | | through the elimination of payment errors, dedicated |
| confusing array of differing hardware and interfaces | | | | equipment, supplies, dedicated phone lines, additional |
| often results in reduced merchant efficiency and lower | | | | training, and improved customer satisfaction rates. |
| customer satisfaction levels. | | | | |