A Point of Sale (POS) terminal in a semi-integrated payment system generates an IP address for a peripheral device, such as a Personal Identity Number (PIN) pad, for example, that is communicatively connected to the POS terminal. The POS terminal also generates an IP Configuration message that includes the generated IP address and sends the message to the peripheral device. This configures the peripheral device to securely communicate user data with one or more POS nodes in a POS network while bypassing the POS terminal.