PDQ machines are used to process card payment transactions at the point of sale. The name is an acronym for the ability to Process Data Quickly. For a number of different reasons PDQ machines have become extremely popular in the last few years, and they are probably the most common device used for processing card payments in the retail environment.
Before the Chip & Pin system was introduced, PDQ machines were used to read data that was embedded in the magnetic strip on the back of the payment cards when they were swiped through the card-reader. The POS included connection to the cash registers, where the items and total transactions values were input. The system also includes the option for manual input of the transaction value. The PDQ machines were then involved with the verification and authorization process, and, in the case of credit card payment transactions, purchasers were asked to sign slips in order to match signatures on the back of the credit cards.
The recently introduced Chip & Pin system was developed to reduce the occurrences of payment card frauds that according to recent reports, total billions annually. Each payment card is assigned a 4 digit PIN which should be entered into the machines as another layer of verification. The cards now include embedded computer chips, that are replacing the magnetic strips on the backs of the cards. The cards are inserted into the machine, and are read in almost the same manner that the magnetic strips were read, but the data storage is now in a different form of integrated circuits and contact with the reader is needed.
Signatures are no longer needed for authorization, as the transactions are completed by the PDQ machines. There may no longer be any input required from the retailer, and the machines are now being used in self-serve units.
It is also possible to use the machines without the card-holder being physically present during the transaction. Retailers or merchants still have the option of manually entering card information such as the card number, during telephone sales, but in place of the assigned PIN, alternative information such addresses or personal security codes, may be requested. The duration of the process may increase slightly when compared to the input of Personal Identification Number.
Retailers are required to pay some fees that are associated with the use of PDQ machines. Processing fees are included with all credit card transactions, and these fees are usually higher than those of other payment cards. However there continues to be dramatic increases in both the volumes and the number of electronic payments, and it is hoped that economies of scale, with much higher volumes, can contribute to lower processing costs.
The machines are available in both the wireless and wired versions. The wireless version is most suitable for mobile commerce, when payments can be processed, anywhere, and at any time, while retailer stores continue to use the wired version.
For the merchant or the retail outlet, not having a method to process credit card payments will result in lost sales as most consumers may often wish to avail themselves of the opportunities and conveniences to pay with payment cards.