The Need for Speed at the Point-of-Sale

Transcription

1 Enhanced Communications White Paper The Need for Speed at the Point-of-Sale Expanding consumer reliance on card payments drives demand for faster transaction options. Broadband connections speed up lines and open up new market opportunities.

2 Speeding Up Card Acceptance Consumers worldwide are using credit and debit cards at an ever-increasing pace, and merchants are struggling to more efficiently handle those transactions. In the U.S., consumers now use credit and debit cards more than they use cash and checks. Around the globe, the increasing popularity of debit cards is outpacing even credit card use. And merchants want to handle even more types of cards, such as gift cards that drive customers into stores and loyalty programs that entice customers to keep on coming back. Merchants and other organizations need to handle more transactions during peak times to increase sales and provide better customer service. Manufacturers of card-accepting point-of-sale terminals are responding to these needs with more powerful devices that can process multiple applications in a safe, secure manner. But dial telephone authorizations are a bottleneck slowing merchants ability to process the increasing flow of card transactions. And phone costs are an increasing irritant as businesses seek to become as cost-efficient as possible to win and keep customers happy. The Wait is Over! VeriFone, the trusted worldwide leader in secure electronic payment technologies with more than 11 million electronic payment systems shipped, is the first POS manufacturer to truly harness the power of secure Enhanced Communications to break the telecom bottleneck. Enhanced Communications terminals let merchants process transactions over a lightning-fast, always-on connection using IP the same Internet Protocol that allows you to browse the web or send and receive . IP is used today in cell phones, satellite TV, home PCs, and portable laptops and PDAs. IP can work over the public Internet or over private networks. VeriFone's new Enhanced Communications electronic payment systems use that same IP to send secure transmissions that are reliable, simple to use and flexible to operate. Enhanced Communications delivers an entirely new level of speed, security, breadth of connectivity and mobility options, and ease-of-use. Enhanced VeriFone, Inc. September

3 Communications terminals are opening new markets, inspiring innovation, and introducing new value to the point-of-sale. The speed, transportability, and versatility of Internet-based payment terminals can extend card-based payments far beyond the store countertop and into new revenue-generating venues such as sidewalk sales, outdoor garden departments, or even airport, mall, or stadium kiosks. Most large companies are already extensively networked internally and connected to the public Internet, but for many smaller companies the easiest way to get connected is over broadband DSL Digital Subscriber Line which runs over an existing phone line. Alternatives are broadband access via cable modems, or wireless IP alternatives from cellular phones services or satellite broadcast. Savvy merchants are finding they can take their existing broadband connection, whether it's a DSL line or an installed Ethernet local area network (LAN), and set up their own wireless local area networks without having to lay a single cable. They're using the increasingly popular and in some cases revenue-generating Wi-Fi wireless Internet access. Consumers are IP -Friendly IP has been adopted by general commerce worldwide as the standard way to communicate with the Internet or private networks. Once the domain of geeks and nerds, IP has become increasingly simple to use, with millions of people using it transparently to surf the Web, send and receive , download music or shop online. IP now works on a variety of consumer devices, including personal computers, cell phones, cable set-top boxes and now electronic payment terminals. IP can be used over traditional dial telephone lines but provides no speed advantages in that manner. Broadband IP, however, completely changes the dynamic in accepting payment cards at the point of sale. The most obvious benefit to using Enhanced Communications at the pointof-sale is speedier transactions. Regardless of the type of connection in use, Enhanced Communications systems provide significantly faster transactions than dial. Merchants using broadband IP experience transactions of three-to- VeriFone, Inc. September

4 four seconds, compared to about 14 seconds for dial. Additional benefits include faster downloads and an "always-on" connection that eliminates connect time and provides increased security for safer transactions. Enhanced Communications POS will lead to lower cost of ownership. Many merchants have already deployed some type of networking technology, whether it's an Ethernet-based communication to corporate headquarters, a DSL line for web and access, or even a cable TV connection. Utilizing these existing network connections can immediately eliminate the monthly expense for dial lines dedicated to POS transactions and per-call costs. The Difference between IP and Dial Dial is a tried and true technology for electronic payment authorization that has served merchants well for two decades. However, in locations experiencing high transaction volumes, it creates a bottleneck that costs merchants money in lost sales, lost productivity and customer goodwill. Dial generally operates at 1200 or 2400 bits per second. A simple payment transaction can be completed in about 14 seconds that may not sound like much, but to the 10th person in line it adds about two-and-a-half minutes to their wait. Some busy customers just won't wait. Downloading and updating new applications at the point-of-sale, such as gift card acceptance and loyalty programs, requires much faster transmission speeds. Ironically, faster 56K bits per second modems actually result in transaction times 3 to 4 times longer because it can take from 30-to-40 seconds for a transmitting modem to "handshake" or synch up with a receiving modem before the authorization begins. Enhanced Communications changes the equation dramatically. If you ve ever downloaded a large PowerPoint presentation over a dial connection and waited minutes or more, and then done the same over a broadband IP connection in just seconds, you know the difference it makes. IP-enabled terminals can utilize a browser with secure SSL to support a variety of different applications at the POS, such as prepaid telco cards, gift cards, loyalty programs, and utility payments. With IP-enabled terminals and a broadband service, a storeowner could consolidate all communications voice and data into a single high-speed connection. VeriFone, Inc. September

5 Highly Secure Transactions VeriFone is the first to offer IP-based POS transactions that use the industry-standard SSL encryption standard, which enables secure transactions across public and private networks. Connecting directly to a processing host via IP communications utilizing SSL reduces the dependency on proprietary network access controllers and lowers an acquirer s total cost of ownership. SSL creates a shared key or "secret" between two devices, so that only those devices can understand the information that is passed between them. This creates an end-to-end secure environment so that if someone were to intercept the transmission signal, they would be unable to "read" any information. If you have ever purchased anything on-line, then you ve used the same encryption, which secures billions of dollars in Internet commerce today. VeriFone Enhanced Communications products also comply with EMV, the specification for strong payment security technology that was established by EuroPay, MasterCard and Visa, as well as triple DES (data encryption standard). Abundant Access Options There are a variety of methods to obtain IP transmission capabilities, so access is available virtually anywhere, even remote rural locations. The traditional way of obtaining IP service is over Ethernet connections. Commonly referred to as local area networking (LAN), it requires specialized wiring and connections inside a building or campus of buildings, along with devices to manage the flow of communications. Broadband IP via DSL or cable modem is a widely available means to bring Ethernet connectivity to a location. Its also very cost-effective merchants who have existing connections may be able to add IP-based POS terminals for little or no additional cost. Cable is faster, with speeds of 512K to 3 megabits per second or more. DSL, with transmission of 256K-756K bits per second, is arguably more convenient as it is delivered over existing telephone connections at a different frequency to voice calls so there is no interference. A single DSL or cable modem connection can be routed to multiple Ethernet or Wi-Fi enabled devices using a simple, low-cost gateway device. VeriFone, Inc. September

6 Many wireless phone companies are now offering advanced digital cellular technologies that deliver IP connections and are extremely well suited for merchants who need mobility, such as those who offer delivery services to the home or need to set up in temporary venues such as concert events. Available in two flavors CDMA2000 and GPRS these options work just as cell phone technology does so that as long as you have a power source, you can use anywhere in the service area without having to plug into a jack. Just as the costs of cell phone rates have declined, so too have prices for data rates, which makes this a very attractive option compared to regular phone costs. For more re mote locations where broadband and cellular wireless are unavailable, an alternate option is satellite, delivered via VSAT -- Very Small Aperture Terminal -- dishes similar to satellite TV. VSAT is very attractive when the location is so remote that there are no local Internet Service Providers (ISPs) and dial access would incur long distance rates. Frame Relay is a private network transmission technology used by big companies, such as national chain store operations. Dedicated connections link each store to a central location and combine POS transmissions with data and even private phone networks. While extremely secure and reliable, it generally costs many thousands of dollars. Small to midrange companies achieve some of those capabilities using Virtual Private Network (VPN) technology, which creates a private link over the public Internet by setting up an encrypted end-toend tunnel between systems. ISDN, or Integrated Services Digital Network, is an older form of digital transmission that uses standard phone lines. The service requires an external Terminal Adapter (TA) that places a very fast dial up connection to the carrier. ISDN comes in a variety of bandwidth options traditionally 56K to E1 speeds. Wi-Fi The Wireless Local Network A relatively new technology that has further extended the usability of IP is Wi-Fi, which provides Ethernet LAN capabilities without having to use cables. Wi-Fi uses standardized radio transmissions, which can be secured, to establish a wireless LAN. A merchant who has a DSL or cable modem connection can extend that one IP connection to multiple devices at little installation cost. VeriFone, Inc. September

7 VeriFone's Enhanced Communications POS devices with Wi-Fi option are ready to go out of the box. They communicate with a wireless access point that is attached to the DSL or cable modem or Ethernet port. POS devices can be installed with little or no installation cost and can be readily moved around as long as they are in the range of the wireless access point generally a maximum of 300 feet. For example, a merchant can easily set up a terminal at a sidewalk sale with no network cabling. Many merchants such as coffee shops are expected to set up Wi-Fi hot spots so consumers can use it to access the Internet from their laptop computers and PDA devices. Some merchants are charging access fees and making pure profit off these 'hot spot" connections, while others are providing access as a convenience to draw more customers into their premises and get them to stay longer. The VeriFone Difference VeriFone has harnessed the power of IP-based Enhanced Communications at the POS to ensure merchants benefit from speedy and secure transactions. These advanced systems enable merchants to cut costs and improve profitability while expanding their markets. VeriFone has a full-range of powerful POS terminals featuring Enhanced Communications. The Enhanced Communications family is designed to ensure the widest possible range of choices. Whether your needs and preferences are wired or wireless, countertop or transportable, there is an easy to use connectivity technology available to address every POS environment, from small stores to multilane, from quick serve restaurants to pay at the table, from drive-thru lane to one-time set up at entertainment venues. VeriFone is the industry leader in harnessing the power of Enhanced Communications combined with proven platforms. VeriFone has delivered its Enhanced Communication solutions to every market around the world. It is real and it is working. It is the VeriFone Difference. VeriFone, Inc. September

8 FREQUENTLY ASKED QUESTIONS What is CDMA? Code Division Multiple Access is a digital cellular communications technology that allows multiple frequencies to be used simultaneously. Like GPRS (see below) it enables data to be transmitted over wireless. CDMA2000 is the 3G flavor favored by CDMA carriers, such as Verizon, and is somewhat faster than GPRS. What is GRPS? General Packet Radio Service is an enhancement to digital cellular over GSM networks such as that operated by AT&T Wireless. GSM enjoys wide support outside the U.S. What is IP and TCP/IP? IP stands for Internet Protocol, which is a communications protocol underlying the Internet. An IP address is the number assigned to any Internetconnected computer, such as , and represents the numerical address by which a location in the Internet is identified. Computers on the Internet use IP addresses to route traffic and establish connections among themselves. Transport Control Protocol (TCP) works with Internet Protocol (IP) and keeps track of the packets of data that are routed over the Internet and reassembles them in the correct order on the receiving device so packets of data can be sent via different routes simultaneously for the most efficient transmission. What is a LAN? A LAN is a local area network. Common in office environments for many years and now often used even in home networks to connect devices using the Ethernet communications protocol, LANs provide a wired connection over limited distances to equipment including workstations, printers, POS terminals, front-end processors, controllers, switches, and gateways. VeriFone, Inc. September

9 What is VPN? Virtual Private Network. A VPN provides remote access to an organization's network via the Internet through secure "tunnels", essentially creating a private communication channel over the public Internet and an alternative to more costly private networks using frame relay. What is Wi-Fi? Wi-Fi stems from the term "Wireless Fidelity" and represents a body of specifications adopted by an international standards body, the Institute of Electrical and Electronics Engineers (IEEE). The IEEE has designated specifications for wireless LAN (WLAN) technology. Variants are b, the most widely used version, which provides 11 Mbps transmissions in the 2.4GHz bandwidth; g, which is compatible with b and reaches speeds of 54 Mbps; and a, which is also reaches 54 Mbps speeds but uses a different frequency and is not compatible with b VeriFone, Inc. All rights reserved. VeriFone, the VeriFone logo, Omni, and Verix are either trademarks or registered trademarks of VeriFone in the United States and/or other countries. All features and specifications are subject to change without notice. 09/04 PB Rev A VeriFone, Inc. September