POS terminals · in-store payments
Two seconds at the counter, a day's work behind it
A card tap looks instant. Behind it, the payment travels from the terminal to your acquirer, across the card network to the customer's bank and back. The money reaches you later, at settlement. Knowing each step makes it easier to choose a terminal, read your statements and handle the payments that go wrong.
SHARMA SWEETS
Customer copy
Card•••• 4417
ModeContactless
Auth code0R4K21
Amount₹1,850.00
What happens between the tap and “approved”
A card payment at a counter is two separate events: authorisation, which happens in seconds while the customer waits, and settlement, which moves the money later. The terminal only handles the first.
- 01
Read
The terminal reads the card by tap, chip or swipe, and asks for a PIN if needed.
- 02
Send
It sends the payment request to your acquirer.
- 03
Route
The acquirer passes it over the card network to the card-issuing bank.
- 04
Decide
The issuer checks the card, the balance or limit, and fraud rules, and approves or declines.
- 05
Answer
The answer comes back the same way; the terminal prints the receipt.
| Party | Role |
|---|---|
| Cardholder | The customer paying |
| Issuer | The customer's bank, which issued the card and approves the payment |
| Card network | Carries the request and the answer between acquirer and issuer |
| Acquirer | The bank or authorised payment aggregator that signed you up and settles to you |
| Merchant | Your business |
Tap, insert or swipe
Contactless (tap) is the fastest and, for everyday amounts, needs no PIN. RBI relaxed the additional-factor requirement for contactless card payments at POS terminals up to ₹5,000 per transaction from 1 January 2021. Above that, a tap can still work, but the customer enters a PIN.
The choice stays with the cardholder: RBI's instructions keep their discretion to use contact or contactless mode, and cardholders can switch contactless off or set lower limits on their own cards. So a tap that's declined may simply be a card set that way; inserting it usually works.
| Mode | How | Authentication |
|---|---|---|
| Contactless | Card held near the terminal | No PIN up to ₹5,000; PIN above |
| Chip | Card inserted | PIN |
| Magnetic stripe | Card swiped; a fallback on older cards or faulty chips | As the issuer and network require |
UPI at the same counter
Many customers would rather pay by UPI than card. Modern terminals can show a dynamic QR code for the exact amount, so the payment matches the sale automatically, instead of a printed QR where the customer types the amount.
Some terminals also support tap-and-pay UPI: the customer taps a phone on an NFC-enabled terminal. RBI lists tap-and-pay UPI on NFC-enabled POS machines among the exemptions from two-factor authentication in its Authentication Directions, 2025. Which terminals and apps support it depends on the provider.
Static QR on the counter
Customer types the amount; you check the phone or a speaker announcement.
Dynamic QR on the terminal
Amount fixed by the terminal; payment matched to the sale.
Tap-and-pay UPI
Phone tapped on an NFC-enabled terminal, where supported.
More on QR payments: UPI QR guide.
Choosing a terminal
The right terminal depends on where the payment happens. A billing counter in a shop, a waiter at the table and a delivery rider at the door need different things.
Countertop
Fixed at the till, usually wired to power and network. Suits shops with one or two billing points.
Portable
Battery-powered with mobile data or Wi-Fi, taken to the customer. Suits restaurants and home delivery.
Smart (app-based)
A touchscreen terminal that runs apps, often including billing. Suits businesses wanting billing and payment on one device.
| Question | Why it matters |
|---|---|
| Which payment modes does it accept? | Contactless, chip, swipe, QR, tap-and-pay UPI |
| How does it connect? | Mobile data, Wi-Fi or wired; a weak signal means failed payments |
| Does it connect to our billing system? | Keying amounts by hand causes mismatches |
| What happens when it breaks? | Replacement time and a spare for busy days |
| What does it cost, all in? | Per-transaction charges, rental, deposit, paper and setup |
What accepting cards costs
The main cost is the merchant discount rate: a charge on each payment, deducted before settlement or billed separately. It usually differs by card type (debit, credit, international, business cards) and depends on your agreement. Government rules have set zero merchant charges for some payment types; ask your acquirer which apply to you now.
On top of that, there may be a rental or deposit for the terminal, a setup fee, and paper rolls. Compare offers on the total for your real mix of payments, not on one headline rate.
Work it out on your own mix
Take last month's card and UPI takings, split by type. Apply each offer's rates to each type, add rental and fees, and compare the totals. The cheapest headline rate isn't always the cheapest month.
End of day and settlement
A terminal collects the day's approved payments into a batch. Closing the batch, automatically or at the end of the day, sends it for settlement, and the acquirer credits your bank account on its settlement cycle, net or gross of charges depending on your agreement.
Reconcile three numbers every day: the terminal's batch total, the acquirer's settlement report, and the credit in your bank. A difference usually means a missed batch, a refund, a chargeback or charges deducted.
Terminal batch
What the terminal approved today.
Settlement report
What the acquirer is paying, after refunds, chargebacks and charges.
Bank credit
What actually arrived, on the settlement date.
- More: settlement guide.
Voids, refunds and chargebacks
Void
Cancels a payment before the batch settles, usually the same day. The money never moves; the customer's bank releases the hold.
Refund
Sends money back after settlement, to the same card. The customer sees a separate credit, which can take some days.
Chargeback
Started by the customer's bank when a cardholder disputes a payment. You're asked for evidence; without it, the amount is taken back.
Keep the merchant copy or digital record of every sale, and delivery proof where relevant. Refund mechanics: refunds guide.
When the network drops mid-payment
The hardest moment at a counter is the timeout: the terminal says “no response”, and the customer says their phone just showed a debit. The instinct is to run the card again. Don't, until you know what happened to the first attempt; that's how customers get charged twice.
Check the terminal's last-transaction view or reprint option first. If the first payment didn't complete on your side but the customer was debited, their bank normally reverses the debit; give them the charge slip or reference so they can follow up with their bank. RBI also has a framework for small-value offline payments, listed among the authentication exemptions, but whether a terminal supports it depends on the provider.
| Terminal shows | Meaning | Do |
|---|---|---|
| Approved | Payment authorised | Hand over the receipt |
| Declined | The issuer said no | Ask for another card or method; don't retry the same card repeatedly |
| Timed out or no response | Result unknown | Check the last transaction before trying again |
| Approved, but printing failed | Payment authorised | Reprint or send a digital receipt; don't charge again |
Hotels, rentals and tips: amounts that change
Some businesses don't know the final amount when the card is first presented. A hotel at check-in, a car rental, a restaurant where a tip is added: these use variations on the normal sale, where available on your terminal and agreed with your acquirer.
Pre-authorisation
An amount is reserved on the card at the start, then completed for the final amount later. Holds that are never completed tie up the customer's limit.
Completion
The final amount is charged against the earlier hold, and the rest released. Complete promptly; holds expire.
Tip adjustment
Where supported, a tip is added before the batch closes. Train staff on the exact steps.
Which of these your terminal offers depends on the terminal, the acquirer and your business category.
Several counters, several terminals
Each terminal has its own identifier and usually its own batch. With several counters or outlets, settlements arrive per terminal or per outlet, and reconciliation has to follow the same structure.
Keep a register of terminals: identifier, location, the counter it sits at and who's responsible for it. When a settlement looks short, the register tells you which terminal to look at, and it's the first thing you'll need if a terminal goes missing.
Terminal register. Identifier, location, owner, serial number.
One batch per terminal per day. Closed at the same time each day.
Settlement by terminal. Matched to that terminal's batch, not just a daily total.
Lost or broken terminals. Reported to the acquirer at once, so it can be disabled.
Questions for an acquirer before you sign
The acquirer is a longer relationship than the terminal. It settles your money, handles your disputes and decides your charges. These questions separate offers that look similar on paper.
- 01What are the charges for each card type and for UPI, and are they deducted before settlement or billed?
- 02When are we settled, and does that change at weekends and holidays?
- 03How are chargebacks communicated, and how long do we have to respond?
- 04Which terminal models are offered, and what does a replacement take?
- 05Is there a minimum monthly volume or a charge if we fall below it?
- 06What does closing the account involve, and are there exit charges?
Settlement timing around holidays: settlement holidays.
Training the people at the counter
The terminal is only as good as the person using it. New staff learn the happy path in minutes; what they need training on is everything else: a decline, a timeout, a refund, a customer who says they were charged twice. Write these down as a one-page card kept by the till.
Declines. Offer another method politely; never guess why.
Timeouts. Check the last transaction before trying again.
Refunds and voids. Who may do them, and how; always to the original card.
End of day. Closing the batch and keeping the summary slip.
Suspicious behaviour. What to do, and whom to call.
Keeping the counter safe
Most card fraud at counters involves people, not technology: a card taken out of sight, a PIN watched over a shoulder, a terminal swapped or tampered with. A few habits prevent most of it.
Card stays with the customer. Bring the terminal to them; don't take the card away.
PIN is private. Shield the keypad; staff never ask for or note a PIN.
Check the terminal. Compare it with its serial number each morning; look for anything attached.
Know your staff. Only named staff operate refunds and voids, with their own login where possible.
Watch refunds. Refunds without a matching sale are a classic internal fraud.
Where Peneu fits
This page doesn't say Peneu supplies POS terminals or acquires card payments, and no terminal model, network or acquiring partner is named. Whether Peneu offers in-store acceptance through an acquiring partner, with which terminals and payment modes, is confirmed during onboarding.
POS machine questions
What is a POS machine?
A point-of-sale terminal: the device at a counter that reads a customer's card (by tap, chip or swipe), sends the payment for approval, and prints or sends a receipt. Many terminals also show UPI QR codes, and some accept tap-to-pay UPI.
When does a contactless payment need a PIN?
RBI relaxed the additional authentication requirement for contactless card payments at POS terminals up to ₹5,000 per transaction, from 1 January 2021. Above that, a contactless payment can still go through but with a PIN. Cardholders keep the choice of tapping or inserting, and can switch contactless off or set their own limit.
Who provides POS terminals?
Terminals are provided by acquirers, the banks and authorised payment aggregators that sign up merchants to accept card payments, often through their own or partner device suppliers. The acquirer is the one that settles the money to you.
What does accepting cards at a POS cost?
Usually a charge per transaction (the merchant discount rate) and sometimes a terminal rental, deposit or setup fee. Rates depend on the card type, your business and your agreement. Government rules have set zero merchant charges for some payment types; check the current position with your acquirer.
What's the difference between a void and a refund?
A void cancels a transaction before the terminal's batch is settled, usually the same day, so the money never moves. A refund sends money back after settlement, and the customer sees it as a separate credit. Use a void when you can; it's cleaner for everyone.
What is a chargeback?
A reversal the customer's bank starts when the cardholder disputes a payment, for example claiming they didn't make it or didn't get what they paid for. The acquirer asks you for evidence, such as the signed or PIN-verified receipt and proof of delivery. Keep receipts and records for every sale.
Can I accept UPI on a card machine?
Many terminals can display a dynamic UPI QR code for the exact amount, and some support tap-and-pay UPI on NFC-enabled terminals, which RBI lists among the exemptions from two-factor authentication. Which a terminal supports depends on the provider.
What if a customer is debited but the terminal shows failed?
Don't charge again until you've checked the terminal's last transaction. If the payment didn't complete on your side, the customer's bank normally reverses the debit; give the customer the slip or reference so they can follow up with their bank.
Can I accept international cards on a POS terminal?
Often, if your acquirer enables it for your business. International cards usually carry different charges. Ask the acquirer, especially if you serve tourists.
Does Peneu provide POS machines?
This page doesn't say Peneu supplies POS terminals or acquires card payments, and no terminal model or acquirer is named. Whether Peneu offers in-store acceptance through an acquiring partner is confirmed during onboarding.
Official sources
- RBI — Card transactions in contactless mode: relaxation in requirement of additional factor of authentication (4 Dec 2020)Additional-factor relaxation for contactless card payments at POS raised to ₹5,000 per transaction from 1 Jan 2021; cardholder discretion retained.
- RBI — Authentication mechanisms for digital payment transactions Directions, 2025 (25 Sep 2025)Annexure-1 exemptions, including small-value contactless card payments and tap-and-pay UPI on NFC-enabled POS machines.
Last reviewed . Examples, amounts and screens marked illustrative are not Peneu figures.