Currently Microsoft Terminal Services now RDP Services has a bug (confirmed by MS) when it comes to USB Credit Card Swipers. Although Microsoft is not planning to fix this confirmed issue, there is a work around. Currently you use software on the PC to connect to Terminal Services called “Remote Desktop Connection”. In this software select OPTIONS button, then LOCAL RESOURCES. There you will see a section called KEYBOARD. Change the option under KEYBOARD from “in full screen mode only” to “On local computer”. With this fix in place the USB Swipers should work, if not you may have to slow down the data rate that is transferred between the local computer and the host.

This should have minimal effect on your terminal service users. Most users don’t even use Alt+Tab to change programs, they use the mouse. With the previous setting “in full screen …” when a user pressed Alt+tab to change programs the selection would occur inside the terminal service session. With the new change “on local computer” If they press Alt+Tab, then they will switch between terminal services and their local computer programs. Again I feel the impact is minimal if not zero, since the most likely won’t even be running any other application on the local computer except terminal services.

Magtek Credit Card Swiper Configuration and Reset
The following may be helpful in troubleshooting:

Download the Magtek software:

Run the program and then enter the following commands:

This will restore device to factory defaults and it will be turned into an HID mode device
FC 55 AA and then Enter key
02 and then Enter key

If you require keyboard mode device, then follow this code below and it will be completed back to factory defaults:
01 10 01 and then Enter Key
02 and then Enter key

To slow down the data rate:
01 02 10 and then Enter key
02 and then Enter key

I have found that 10 is too slow for some users. Using 5 looks like a happy medium for the user and the data actually working.

Additional Swiper configuration utilities can be found here:

Partially taken from: