Credit Card Terminal Security Error with T4200 Terminals

Broken Hypercom Credit Card Terminal.

Broken Hypercom Credit Card Terminal.

Credit card terminal suddenly not working?  Are you getting an error code upon start up that says, “Authentication Failed Security Error Code 1”?  Does it then say, “Security Error.  Call Service Provider”?  Well I have some bad news!  In short, you are now the proud owner of an electronic doorstopper, as your credit card terminal is now worthless.

I’ll try to explain briefly about this issue, as I understand it and what your potential options are.  This issue is isolated to the Hypercom/Optimum/Equinox terminals of the M and T series.  (Hypercom, Optimum and Equinox are the same with a different name).  So, if you have a M4100, M4230, M4240, T4205, T4210, T4220, T4230 or T4260 you might be having issues.  Here’s the official page from the company

Anyway, it appears that the firmware certificate on these terminals expired on October 19th, 2015.  From other sources, I gather that they are 10 year certificates.  The original manufacturer of these terminals was Hypercom which was bought out by a competitor, VeriFone.  I guess one could assume that there was little incentive to support these older terminals and in fact it would appear that this could be a boon for them with new terminal sales.  It’s worth noting that some of the terminals have firmware that is not expiring at this time and they will continue to work (for awhile).  The service providers, however do not track the firmware that goes out in the terminals, so there’s no way for them to know if a terminal will have these issues.

So, what happens is, since the certificate has expired, which disallows any further use of the terminal.  It checks the certificate upon start up, so this issue will only be discovered after the terminal is powered off.  This will happen if a power outage or it is unplugged or the electricity is turned off at night.  So, if you have one of these terminals that is working, DO NOT TURN OFF THE POWER until you have a back up method of processing credit cards! 

So, you’ve got a dead terminal.  Now what?  Well, call your service provider tech support.  As soon as you tell them what terminal you have and the error code, they’ll realize you need a new terminal.   They will present your options.

If there’s a silver lining to this issue, it’s the fact that the terminals that are dropping like dead flies are all older terminals and aren’t EMV compliant.  The fact is, as of October 1st, there’s been a liability shift and it’s time to upgrade these outdated terminals anyway for the merchants protection.  The new replacement terminals will be EMV compliant and by all accounts should last for many years.  To maximize the value of this terminal change and extend the life expectancy and functionality I have one very important tip.

Get a terminal that isn’t only EMV compliant but is also NFC compliant.  NFC stands for Near Frequency Communication and it is a reader within the terminal that allows it to communicate with NFC chips that are in mobile phones.  This allows mobile phone payments like Apple Pay, Google Pay and more.  Yes, I know it’s not that common to see these transactions right now, but let’s think beyond the next 6 months if upgrading anyway!

Robert McBeath is a Certified Payment Professional and President of Cornerstone Business Solutions and the COO of BizzGrizz.  Robert has extensive experience offering merchant services and cash advances to business owners. He can be reached at 888.979.4731 x802 or by email


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  1. Just went through this yesterday the 29th, when I called my Service Provider they informed me that there was an update issued the 23rd of this month to prevent the outdated machines from malfunctioning, which in the end result is exactly what it did to the machine. If you ask me I think it was just a way to force small businesses to have to get the new machines, criminals in my opinion, all of them.


  1. […] Alert Edit, October 2015:  If you have a terminal issue with a Hypercom/Equinox T4200 series credit… […]

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