6-6 Credit Card Machine PIN Pads

Credit Card Processing Machine PIN Pads

There are two different types of credit card processing PIN pads. The first type is called an external PIN pad. An external PIN pad is a totally separate, stand-alone piece of equipment that connects to a credit card machine through a cord that resembles a phone cord. External PIN pads are the most common type of PIN pad and the type that is recommended for reason that we will cover in a moment. The second type of PIN pad is called an internal PIN pad. An internal PIN pad is housed within the actual credit card machine itself.

PIN pads are only useful with retail merchant accounts where a customer will be present to enter their personal identification number (PIN) into the PIN pad. Furthermore, PIN pads may not benefit all businesses. As we will discuss later, debit cards can be processed as a PIN debit or signature debit transactions, and each method carries different rates and fees. Depending on the details of your business a PIN pad may or may not be beneficial. All of this will be covered in detail later in this guide. For now, we will examine the difference between internal and external PIN pads.

Shared Characteristics of Internal and External PIN Pads

Encryption - All PIN pads must be encrypted in order to comply with VISA and MasterCard security standards. If you already own a PIN pad that you would like to have reprogrammed to function with a new merchant service provider, the PIN pad will have to be sent out to re-encrypted. You will almost always be charged for shipping costs and encryption fees.

Flashing - Before a PIN pad can be re-encrypted it must be flashed. When a PIN pad is flashed its memory is erased and there is always a chance that it will be destroyed in the flashing process.

External PIN Pads
External PIN pads are the most common type of PIN pad. When a customer wishes to enter their PIN number to pay for a purchase using their debit card, they simply enter their PIN number on the PIN pad to complete the transaction. Because the PIN pad is attached to the terminal via a cord, the customer is able to pick up the PIN pad to enter their number in privacy if they wish. If the PIN pad ever malfunctions or fails, it can easily be replaced without causing any downtime to the credit card machine. Furthermore, the PIN pad may be sent back to the processor to be re-encrypted or repaired fairly easily.

Internal PIN Pads
External PIN pads reside within a credit card processing machine. In order for a customer to enter their PIN number on an internal PIN pad, they must be given access to the credit card machine by either walking around the sales counter or by having the terminal turned around to face them. With the onslaught of identity theft these days, many consumers are very secretive about their PIN numbers and they will probably want to have privacy when they enter their PIN information. As mentioned in the above paragraph, PIN pads need to be flashed if they are to be reprogrammed to work with a new merchant service provider.

Flashing and re-encryption cannot be done over the phone making it necessary for the PIN pad to be sent to the equipment dealer. If you choose to use an internal PIN pad you will need to ship the entire terminal off to the dealer for re-encryption, leaving yourself without a credit card machine. Also, flashing a terminal has a tendency to fry PIN pads on occasion. If a terminal's internal PIN pad is ever fried, it often results in the failure of the whole unit. It is pretty upsetting to fry a PIN pad that is worth $100, and in the process destroy a terminal that is worth $500.

Granted, our opinion about PIN pads is obviously biased. With that said we are simply conveying what we have learned through years of real-life experiences where such problems have arose time and time again. Unless you are using, or are going to be using, a wireless credit card machine where carting around another PIN pad is not an option, you should save yourself a lot of grief and aggravation and purchase an external PIN pad. You'll thank us someday... we promise.

Do not copy or redistribute this content in any way without express written permission from the Merchant Council