History

Electronic credit card machines were created to replace slower voice transaction authorizations---retrieval of approval from the card's issuing financial institution to continue with a transaction---with faster electronic authorizations.

Primary Function

Transactions occur via key-entry of a customer account number from a card's front or by swiping the magnetic stripe containing data on a card's back through a magnetic reader in the machine.

Other Functions

Plastic debit and gift card processing via use of magnetic stripes as an alternative to checks and gift certificates. In addition, some machines provide check verification and Dynamic Currency Conversion (DCC) services.

Feature Facts

Programmable "hotkeys" make faster processing at fast-food and sit-down restaurants possible. Wireless machines allow restaurateurs to offer table-transactions and vendors at crafts shows and fairs to accept credit cards.

Warning

The "store and forward" feature on some machines, although useful during network outages or for merchants who travel to areas without service, poses substantial risk to the merchant as approval confirming funds availability doesn't occur until after the "stored" data is "forwarded" with a re-established network connection.

Source:

VeriFone

Credit Cards.com: The History of Credit Cards; Emily Starbuck Gerson and Ben Woolsey