Many credit card terminals only accept visa and mastercard.  If a
business wanted to add american express, would they have to buy a new
card terminal or could they continue to use the old terminal?

All credit card readers have the capacity to read all three major
credit cards as well as many others, such as Discover, JCB, Diner's
Club, or in fact any card with a magnetized barcode. In fact, these
are sometimes called "magnetic strip readers (MSRs)."

To quote http://www.posworld.com/magcardreaders.html:
"Credit card readers, or magnetic stripe readers (MSR), are used to
read the magnetic stripe on plastic cards, gift cards, credit cards,
driver's licenses, security badges, etc. They're most often used for
credit cards. Mag stripes have 1, 2, or 3 tracks of data. Gift cards,
id cards and other specialty cards often use track 3. Track 1 & 2 are
typically reserved for credit card use. Most credit card readers allow
you to enable or disable tracks. MagTek and ID Tech have been sold and
supported for many years by POS World."

Magnetic stripe readers that are part of a PoS (Point of Sale)
terminal will be connected into a standalone piece of hardware or a
computer that can process the card and take the appropriate steps to
verify the card information. Older models relied exclusively on
hardware devices that were essentially modems, which would call a
number and dial out the read credit card number over the phone to the
verification number, then read the signal coming back. Now computers
can process the account information more intelligently and use
different means to check the account information.

In all cases, however, the vendor must have a merchant account with
the credit card vendors they wish to support. Software POS solutions
are generally the easiest to add or remove merchant accounts, but many
standalone POS devices will allow you to use multiple merchant
accounts as well, so a new teriminal would NOT be required in most
cases.

Hope this helps you with what you were looking for!

- bookface-ga

Good answer. quick response.

Amex does try to sell their own terminals and try to get you on a PIP
system.  This system is where Amex is dialled first when the terminal
authenticates.  All other cards become secondary.  Great, if you
mostly do Amex.  If you don't, watch the fees increase for all the
other card types.

A better idea, if your terminal is capable of it, is to use Amex
SPLIT-DIAL.  This has your terminal dial your primary provider most of
the time, and Amex directly only when you swipe an Amex.  Definately
can save some fee ($$) if you use this technique and your terminal is
compatible (eg: most verifone Tranz terminal apps can do this).

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