Card machines are everywhere these days. Chances are you’ve used one in cabs, coffee shops, supermarkets, restaurants or even beauty salons. The interac machine is one of the most commonly used electronic payment terminals (EPTs) in Canadian retail outlets. How does it work? Find out in this guide!
How Interac Debit works with the Interac machine
If you are a business that accepts physical payments from your customers using card readers, you need to know how these devices work. The same is true if you are a consumer who is accustomed to making purchases with credit cards at retailers or stores.
Simply put, the interac machine works in a few steps. First, the merchant enters the total amount to be paid on the machine and presents it to the customer for payment. Then, the customer confirms the total amount, inserts his card and enters his security code on the machine.
The financial institution that issued the card finally authorizes the payment. The customer’s card will be charged and the company (the seller) receives payment. The payment authorization process is a series of events that take place in a few seconds via the Interac network. Here are the details:
First step: Payment authentication
A merchant bank receives the request from the card machine via a telephone or broadband line. One of the main tasks of a merchant bank is to create and maintain a merchant account that allows the company to take card payments.
Step Two: Transaction Submission
Once the request is received, the merchant bank asks the debit or credit card provider (such as VISA or MasterCard) to request authorization from the customer’s bank that is about to make the payment.
Step Three: Request for Authorization
The card provider will verify that the card details are correct and will forward the authorization request to the customer’s bank.
Step four: Response to authorization
The issuing bank is the one that provides the customer with the credit or debit card. This bank will verify the customer’s details and ensure that they have sufficient funds in their account to make the payment.
Step five: Payment from the retailer
Once the authorization is granted, a signal is sent back to the Interac machine. A receipt is printed with proof of accepted payment. Although authorization occurs in seconds, it normally takes 2-3 days for the customer’s bank to send the payment to the merchant’s bank.
Some features of the Interac machine
Now that you’ve got a handle on how an interac machine works, it’s time to review the different features of the device.
Contactless is a fast, simple and secure way to accept payments. Unlike the traditional payment process described above, it does not require a PIN to authorize the transaction. The customer simply touches the interac machine with their card.
The payment data is then received from the card’s chip via radio frequency identification (RFID) and near field communication (NFC). Within seconds, the payment is authorized and the customer’s payment card is charged.
For added security, contactless payments are capped. Each contactless transaction must remain below an amount set by the customer’s bank or credit union. Similarly, customers who make contactless payments must also respect certain overall spending limits set by their financial institution. These safeguards help prevent misuse of the card if it is lost or stolen.
Mobile payments with Apple Pay and Google Pay
Apple pay and Google Pay are a mobile payment solution that allows customers to pay for goods or services using a device running the Android, iOS or Mac OS operating system. The device can be a cell phone or a tablet.
In effect, the customer adds their payment card details to their device beforehand. They can then use their device to make a quick and secure payment in store.
The principle of operation is the same as the contactless payment above. Here, instead of approaching a bank card to the interac machine, it is rather the cell phone that the customer puts on the machine to proceed with the payment. In practice, payment is also made using radio frequency identification (RFID) and near field communication (NFC).
Adding tips during a payment
The interac machine allows the merchant to ask customers for a tip. If the feature is properly configured, the customer will receive a message on the machine’s screen asking if they want to leave a tip right after confirming the total amount of their purchases on the terminal. If the customer presses the CLEAR button, the transaction will proceed normally without a tip being added. If they press the ENTER (Yes) button, they can specify a tip amount to be added to the transaction.
The functionality for customer refunds
In some situations, the merchant needs to refund the customer for a payment that the customer has made. Usually, the interac machine offers a REFUND option in the MENU. Simply press this option and enter the amount of the refund transaction and press ENTER.
You may be prompted to enter your supervisor number into the machine to complete the transaction. The transaction should proceed normally without the need for the customer to enter their PIN.
Can a transaction fail with an Interac machine?
Yes, your card machine may tell you that a transaction has failed for a number of reasons. In this context, something may have gone wrong during the transaction validation process.
The transaction failure may also be due to the fact that the customer does not have enough funds in their account or does not have enough credit left to cover the cost of the transaction. In this case, it is the customer’s bank that will not authorize the payment request.