What is a POS Payment?

A POS (Point of Sale) payment is a card-based or device-based electronic payment made at the physical or virtual location where a sale occurs. The POS terminal reads card data via magnetic stripe, EMV chip, or NFC contactless technology, then communicates with the card network (Visa, Mastercard, NAPAS) and the issuing bank to authorise and settle the transaction in real time.

Types of POS Terminals

• Traditional POS: Countertop terminal with receipt printer, used in retail, restaurants, hotels
• mPOS (Mobile POS): Portable card reader paired with smartphone/tablet, ideal for mobile merchants
• SoftPOS: Software-only solution turning an NFC-enabled smartphone into a terminal, no additional hardware required
• Self-service kiosk: Automated checkout terminals in supermarkets and transport hubs

Transaction Flow

Card tap/insert/swipe → Terminal captures card data → Authorisation request sent to acquirer → Acquirer routes to card network → Network forwards to issuing bank → Issuer approves/declines → Response returned → Receipt printed. Average authorisation time: under 5 seconds.

Merchant Fees

Merchants pay a Merchant Discount Rate (MDR) per transaction, typically 0.5%–2.5% depending on card type (debit vs credit), card network, and merchant category code (MCC). In Vietnam, the State Bank regulates maximum MDR caps for certain transaction types to promote cashless payments.

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