Card terminal

What it means

A payment terminal is a device or phone app through which a merchant accepts cashless payments by card, phone or watch. It is provided by a bank or payment institution under a card acceptance agreement, which credits the money from transactions to the merchant’s account.

The provider charges fees for accepting payments. They may be a percentage of each transaction, a fixed amount, a monthly terminal fee or a combination. For ordinary in-store sales, these are costs the merchant has to build into the margin.

A payment terminal is not the same as a cash register. When selling to consumers on the premises, a receipt from the e-kasa system must be issued even for card payments. For online sales, a payment gateway is used instead of a terminal.

How it works in practice

When choosing a terminal, we compare total costs with the client at their actual turnover, not just the advertised per-transaction fee. With low turnover a phone-based terminal without a monthly fee may be cheaper; with higher turnover an offer with a lower percentage and a monthly charge may win.

For the accounts it matters how the bank credits the takings. If they arrive net of fees, revenue must be booked in full and the fee as a separate expense. The basis is the provider’s monthly statement, matched against the bank statement.

Because card takings arrive with a delay, usually one to several working days, cash in transit has to be recorded at month-end and year-end. Otherwise the account balance will not match the books and the last days’ takings may fall into the wrong period.

What to watch out for

A common mistake is not issuing an e-kasa receipt for card payments on the grounds that “the payment is in the bank anyway”. The law requires a receipt regardless of payment method, and a financial administration inspection can impose a fine.

Watch the contract terms too: minimum commitment period, early termination fees and device rental charges. Some offers look cheap but become expensive when the company wants to switch provider.