POS transaction, meaning a transaction at a Point of Sale terminal, is a common way for retailers to capture customer payments. However, POS transactions are often limited to domestic brick-and-mortar stores and are rarely a merchant account option for offshore and international companies.
In this article, we’re going to share everything you need to know about POS transactions, including their meaning, how they work, and the difference between POS transactions and several alternatives.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- POS Transaction Meaning
- POS Transactions vs Debit Transaction
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
POS Transaction Meaning
POS transaction, meaning a payment that is processed through a Point of Sale (POS) terminal, is an example of a financial exchange with a merchant that provides goods or services to a customer.
In most cases, point-of-sale systems are designed to accept certain credit cards, may operate in multiple currencies, offer receipt generation, and streamline payment processing and related business operations.
Additionally, because point-of-sale machines are used for in-person payment acceptance, they typically have lower dispute rates and rarely result in customer chargebacks.
Not surprisingly, point-of-sale terminals have become a critical component in generating revenue for physical businesses. Meaning POS transactions are essential to the ongoing operation of businesses.
What Is a POS System?
POS system is the short form for a Point of Sale system, which is a broad term describing a hardware terminal that accepts credit and debit card payments from customers on behalf of retailers.
Of course, the hardware is also supported by the use of software, which captures the customer information and communicates with the other financial institutions involved in the processing of card payments.
POS Transactions vs Debit Transaction
The main difference between POS transactions and a debit card transaction is that POS transactions can include credit cards and debit cards while a debit card transaction only includes debit cards.
That said, a debit card transaction can also take place over the phone, online, or via an ATM, all of which would not be considered POS terminals. In other words, a debit card transaction may be classified as a POS transaction, only if it is completed using a POS terminal.
Do You Want Our Free Non-Resident Banking Guide?
Sign up here to receive our Free Non-Resident Banking Starter Guide and weekly updates on the best account opening options available:
Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into the meaning of POS transactions. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What Is POS Transaction in a Debit Card?
If you see “POS Transaction” on a debit card statement, it refers to a payment for goods or services via a Point of Sale (POS) terminal. In most cases, specific details are provided after a transaction has moved from pending to completed, which will include the actual name of the vendor that processed the POS transaction with your debit card.
What Is a POS Example?
An example of a POS transaction is the process of paying for a pair of shoes. But, instead of paying cash, the transaction will need to involve a debit or credit card. When purchasing the shoes, the buyer provides the seller with their physical credit card. This credit card is then swiped, inserted, or tapped on a physical payment terminal. This terminal is called a Point of Sale terminal or POS machine.
What Is ATM vs POS Transaction?
The main difference between an ATM transaction and a POS transaction is that an ATM transaction takes place via a financial institution’s automated teller while a POS transaction takes place at a commercial entity. In other words, ATM transactions directly engage a bank while a POS transaction engages a transaction with a business.
How Do I Check My POS Transaction?
If you are running a POS terminal and need to confirm a transaction, you can log into your Point of Sale software. After logging in, navigate to transaction history. You will then need to select the time of the transaction and review the specific transaction details.
Do You Want Help Opening Bank Accounts?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
GlobalBanks Insider is a dedicated account opening solution that involves direct support from our team and direct introductions to the banks of your choosing. It gives you instant access to the…
+ Direct support from a team of banking experts
+ Direct introductions to your desired banks
+ Answers to your most pressing questions and challenges
+ Expert insights on which banks to choose & why
+ Plus, FULL access to our entire suite of account opening tools and intelligence!
And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
You can learn more on the Products page on our website.
