The merchant account itself is nothing more than a special type of bank account. Just as your checking account is useless without a checkbook, a merchant account is useless without some method of initiating the transfer of funds into and out of the bank account. Terminals and gateways are the tools used to do this. Physical terminals include a magnetic strip reader and a numeric keypad. Some physical terminals also come with an alphanumeric keypad to allow credit card information to be keyed in when the magnetic strip reader cannot read the swiped card.
Physical terminals connect to a telephone line and dial the processing server to transfer the data.
Physical terminals may be purchased or leased from a Merchant Account Provider. Some Internet and MOTO merchants use a physical terminal equipped with an alphanumeric keypad to input credit card information in lieu of using a software or virtual terminal. Leading manufacturers of physical terminals include VeriFone and Hypercom. The data is transferred to the processor using your computer's modem and telephone line. Software terminals may be purchased or leased from a Merchant Account Provider.