This article appears in the Feb. 5, 2009, edition of ISO&Agent Weekly.
For ISOs and processors, it seems natural that merchants would want to replace an old, slow and outdated dial-up point-of-sale device with a fast dual-communication device. The merchant saves money in bypassing dial-up service and speeds transactions over the Internet in seconds.
An Internet protocol device sends transactions to processors via a high-speed network connection. The industry often refers to devices with this capability as IP devices.
While merchants can benefit by embracing updated technology, many choose to continue using older equipment because they prefer not to buy new equipment when their current equipment works. Some merchants also want to avoid the perceived hassle of installing a new POS device.
Challenges Of IP Devices
Merchants hate spending money on new equipment. If a merchant bought a dial-up device 10 years ago and a merchant-service provider walks in and sells the merchant updated processing technology, chances are the merchant will want the old POS device reprogrammed to work. The sales rep, fearful of losing a deal, typically agrees to reprogram the old device instead of aggressively selling new technology and does not introduce the IP device as an option.
It is not accurate completely to say merchants will save money by eliminating a dedicated dial-up port in favor of Internet connectivity. Most merchants do not have a dedicated dial-up port for credit card processing. Often, merchants have a shared line with the fax line. Additionally, having an Internet protocol device does not really mean the elimination of a dial-up connection; it means the merchant is prioritizing the Internet connection over dial-up. If the Internet connection goes down, the unit will revert to dial-up processing until the Internet connection is back up and running.
Additionally, merchants sometimes resist purchasing Internet protocol devices because they believe it is difficult to install the technology. Many merchants would rather not string Ethernet cable through false ceilings, down walls and around furniture to make the connection work between the POS terminal and the back-room computer. Many merchants that have Internet connections have had to configure the devices this way, and it is exactly why most merchants resist purchasing Internet protocol devices.
Making IP Devices Work
Prices for dual-communication devices have been dropping, but processors and ISOs need to increase device and installation support for merchants to create a more compelling sales pitch to increase merchant adoption. More needs to be done for merchants from the time they receive the product.
Processors could offer support for dual-communication devices and go beyond the existing Class A certification, which also offers support to the merchant on IP-related issues that have nothing to do with hardware or transaction support. Processors or ISOs handle customer support for Class A-certified equipment, making it easier for a merchant to get help because the processor or ISO knows how the terminal is configured. Manufacturers handle support for Class B-certified equipment.
ISOs also can offer fee-based installation services to the merchant where a merchant can call a telephone number and configure the Internet-capable terminal with a WiFi antenna that plugs into a terminal port. Using a computer with a wireless broadband connection, the merchant can then configure the terminal without hunting for an Ethernet networking cable. It could be a process similar to connecting a laptop computer to a new wireless network, albeit with a few more steps, such as including the merchant account number and updating the terminal's software.
ISOs need to sell dual-communications with Internet protocols first and then dial-up backup and not the other way around. Many of the dual-communication devices in the market are used exclusively for dial-up connections because merchants did not receive sufficient IP support from the ISO or processor when they received the device.
IP processing can be a tremendous asset to a merchant, but until ISOs, processors and vendors make it simple, easy and cost effective for the merchants, it is going to remain an impossible dream.