Credit Card Swiper

Background and Benefits

Credit card swipers let you run credit cards through your POS software or system. They can also read employee cards, customer cards, and gift certificates.

The use of a swiper is essential in getting the needed information from the cardholder's credit card. It tells the merchant if the customer has sufficient amount on his account to cover the purchases he made at the store.

IBM developed the credit card swipe machine in 1970. The first credit card swipers were clunky, manual machines. Before, these manual machines took imprints of the cardholder's credit card to later processing, which was time consuming and costly.

Because of this, merchants and customers alike would rather prefer to use cash if readily available than cards. However, as time passed, technology features of swipers were upgraded.

Basically, the credit card swipe machine was built to be able to read information stored in a credit card. That's why the swipe machines must know everything about a customer's credit card before it can pass through.

How does a credit card swiper work?

It all started with one of the most popular tool in the consumer's world, credit cards. Credit card may simply serve as a form of revolving credit.

It allows the consumers to revolve their balance, at the cost of being charged with interest. It may also become a complicated financial instrument.

Now, most local banks or credit unions issue credit cards. When an individual is approved and the credit provider issued the credit card, the cardholder can now use it to make purchases at merchants or business establishments accepting that card.

The magnetic strip in a credit card contains stored information about the customer. When a credit card is swiped in the swiper, the credit card swiper changes the negative and positive charges of the strip on the credit card into 0's and 1's using a binary code.

Magnets oriented downward represent '0', while magnets oriented upward represent '1'. The credit card machine then gives this important information to the computer that changes the binary code into numbers.

Through these arrangements, important information such as the card number and expiration date encoded on the card can be readily read and transmitted -along with other pertinent sales information entered by the merchant- to the processing network.

With this function, it allows data to be transferred through the telephone line to where the cardholder's bank determines if there is enough money available for the transaction. It allows the merchant to know if the credit card can be accepted or rejected.

Problems on swipers

Problems may also arise with using a credit card swiper. Because of its function and being a part of the computer system, it can be hacked. The cardholder can have his identity stolen by someone or he may incur fraudulent charges.

Also, sales clerks can have access and skim information after the purchase has been made. One common method used by identity thieves to acquire your identity is through 'skimming' at your credit card data from a storage device used on an ATM or a merchant card swiper.

Credit card swipers are one of the powerful tools existing in the merchant world. It has deep effect on both consumers and the economy. They can help consumers for their day-to-day purchases.

Can you imagine life where we can use credit cards and swipe them on our cellphone to make purchases? With the advancement in technology today, things like this will make life easier.

However, it can also make life hard if we plunge in deep debt for ease in swiping cards for careless purchases.

Credit Card Swiper

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