Point-of-sale (POS) system use in Spain has steadily increased for over 12 years. From 2010 to 2019, Spanish businesses acquired more than 350,000 terminals, bringing the total to more than 1,750,000 units. Growth has continued to accelerate in this decade. By mid-2023, data from the Bank of Spain revealed that businesses there had more than 4.2 million POS terminals.

While many call the card reader the “TPV” (the Spanish acronym for a POS terminal), a point-of-sale terminal includes several tools for processing in-person payments. The device or card machine is only one part of this system. Let’s examine the differences between the two terms to clear up this common misunderstanding.

What’s in this article?

• What is a POS terminal, and how does it work?
  
• What is a card terminal, and how does it work?
  
• What are the differences between POS and card terminals?
  
• FAQs about POS and card terminals
  

What is a POS terminal, and how does it work?

A POS terminal is a payment processing system that helps businesses handle transactions. This platform includes several tools, such as payment devices, software, and barcode or QR code readers.

Here are some of the functions a POS platform provides for a business:

• Calculate the total cost of a product or service
  
• Allow the customer to complete the charge; the terminal is involved if a card or digital wallet is used
  
• Contact the bank to request a funds transfer
  
• Generate and print receipts
  
• Track and record sales to maintain the business’s financial records
  

Your POS setup must comply with anti-fraud legislation if you operate in Spain. If your business operates in a physical location and online, choosing a POS that links in-person and web sales is important. For example, with Stripe Terminal, you can use advanced hardware that supports digital wallet and card payments. Plus, Terminal easily integrates with the Stripe Payments platform, allowing you to track and manage in-person and digital transactions from a single system, ensuring a unified commerce experience.

What is a card terminal, and how does it work?

A card terminal collects payment information from a debit, credit card, or mobile device during a face-to-face transaction. While they could operate as standalone devices, they are often connected into a POS terminal.

Generally, a payment setup captures card data, sends it to the business’s POS software, and then forwards it to the provider for authorization. For more details on this process, see our guide to card readers.

What are the differences between POS and card terminals?

In Spain, it’s common to use the terms card terminal (datáfono) and POS terminal interchangeably, but this is not accurate. The reader is only one component of the POS device.

A POS system includes a card reader, a cash register, sales management software, and often a barcode scanner and thermal receipt printer.

Functionally, the card terminal has one primary role: handling payments made with cards or digital wallets. On the other hand, the POS manages sales and, in more advanced platforms, can also track inventory and generate financial reports.

FAQs about POS and card terminals

Can a POS terminal be used without a card reader?

Yes. The POS terminal helps manage sales, but charges can be processed through other methods besides a reader. Using Tap to Pay on Android or iPhone, you can accept cash payments and handle card transactions directly from a mobile device.

Do POS terminals need an agreement with a bank?

Not necessarily. You could purchase the components of a POS setup from any supplier you like. Traditionally, the only part of a POS terminal supplied by a bank was the reader. However, bankless card terminals are now available, eliminating the need for a contractual agreement with a financial institution.

Are fees the same for acquiring a POS terminal and a card reader?

While fees vary by provider, a POS typically requires a recurring payment (monthly or annually), while a card reader normally charges a small fee per transaction. Make sure the provider you choose is upfront and transparent about its rates.

Do both POS and card terminals need an internet connection?

It’s not required, but it is recommended. Some bankless card devices, such as the Stripe Reader S700 and the BBPOS WisePOS E, can process payments offline. Similarly, certain POS solutions are able to operate without an internet connection but with limited capabilities. Because these systems work offline, they don’t complete sales immediately. Instead, they store payment information and complete the process when the connection is restored. Since they cannot instantly verify charges, there is a risk that a transaction might be declined later, for instance, if the card does not have enough funds.