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Be prepared later this year for yet another incarnation of First Data Corp.'s 2-year-old FD100 point-of-sale terminal.
First Data, which already has added the FD50 and FD300 to the line, expects to introduce the FD400, Russell Bird, vice president of terminal and hardware solutions, tells ISO&Agent Weekly.
The FD400 can support either the CDMA or GPRS wireless networks used by such major telecommunication companies as AT&T Inc., Sprint Nextel Corp. and T-Mobile, Bird says.
Taiwan-based Xac Automation Corp. manufactures the terminals, Bird says. Greenwood Village, Colo.-based First Data would not release prices for any of the terminals.
Some ISOs prefer First Data terminals because the devices work only on First Data systems, making merchants reluctant to switch to another ISO using a different processor, observers say.
The drawback for ISOs is merchants may shy away from terminals running proprietary software. Of course, ISOs sell other terminals, too.

The ISO View
Eureka, Calif.-based ISO Humboldt Merchant Services LP sells First Data terminals but only sparingly, according to Ken Musante, company president.
"A lot of folks that we work with don't necessarily want to sell a terminal that can only be used on that type of platform," Musante says. "I understand the reservation, and I understand exactly where they are coming from."
But he has yet to hear an unkind word about First Data's terminals. After a conversation with ISO&Agent Weekly, he made a quick call to his customer-service department and in an e-mail message said his employees praised the terminals.
Merchant acquirers find every terminal has pluses and minuses, Musante says.
"There is not one that is far above the others," he says. "VeriFone, I would say, is at the top, but they are not so far above that there isn't a substitute for a VeriFone product."
Donna Embry, senior vice president at Payment Alliance International, says First Data's terminals opened the floodgates for proprietary terminals.
"What First Data is doing is part of the trend of where the industry is moving right now," she says. Some ISOs, such as Louisville, Ky.-based Payment Alliance , also offer a proprietary terminal.
But some ISOs and merchants still shy away from being locked into a single processor, says Chuck Fillinger, an associate at The Strawhecker Group, an Omaha, Neb.-based consulting company. Fillinger, who worked at First Data for 24 years in the company's business-development group, says merchants appreciate the functions and features of the terminals, but some would resist being limited to First Data processing.
The terminals also present a problem for ISOs.
"A lot of ISOs don't process with just one processor," Fillinger says. "So an ISO's hands are completely tied."

A Little Sharper
At least one vendor views First Data terminals as a threat.
"First Data is a noteworthy competitor, and we certainly keep an eye on their initiatives in this area," a spokesperson for San Jose, Calif.-based VeriFone Holdings Inc. said in an e-mail message. VeriFone, however, says most ISOs and merchants want payment devices that are flexible and adaptable–a knock on the First Data terminal line's exclusivity.
But Tim McWeeney, vice president of North American sales for Woburn, Mass.-based terminal vendor Way Systems Inc., does not see that exclusivity as a negative.
"That's just part of the deal," McWeeney says. First Data's involvement with terminals will help make other vendors better, he says.
"The more awareness there is of the choices at hand, it's better for everyone," McWeeney says. "And if this means I have to sell a little sharper and a little smarter, then why is that a bad thing?"
Scottsdale, Ariz.-based Hypercom Corp. and France-based Ingenico S.A. did not respond to requests for comment, but ExaDigm Inc. executives say they do not view the First Data terminals as competition.
"From ExaDigm's prospective, we see the competition being from Hypercom and VeriFone," says a spokesperson from the Santa Ana, Calif.-based terminal vendor. "The First Data terminals have not had any impact on us."

Under The Microscope
In September 2006, First Data released the FD100, which was joined by the FD300 and the FD50. The FD200 processes checks.
The company had two reasons to introduce a proprietary terminal line, First Data's Bird says. "We did look at all the hardware out there, and each manufacturer specializes in [its] own style," Bird says. "And we wanted something that was more universal so we could have an offer to our customers."
First Data uses a sole software program on all of its terminals to control which applications are functional for the merchant, Bird says. For example, if a merchant starts with credit and debit card processing and later wants to add rewards or accept gift cards, First Data can switch on the application in the software. The merchant does not have to buy a different terminal to add a feature.
"Unless we digitally sign an application, it will not be allowed to download into the device," says Chuck Chagas, First Data vice president of products and development. "When we go to market with the FD, [the terminal is] fully featured with all the products and services we offer," Chagas says. Services include accepting checks and credit, debit, gift and loyalty cards.
First Data adopts a hands-off approach to the sale of its terminals. The company does not require affiliated ISOs or agents to sell its terminals. "We simply go out to them and says, 'Here is what is available to you,'" he says. "We have so many different channels that we leave it to our end-user, the customer, to make a decision on what they will sell."
Security was another reason to launch the line, Bird says. With a line of terminals using the same software, First Data can develop a single security patch or update and push it out to all of the devices.
"The older terminals can't accommodate the new requirements, and there are a lot of people who have the older terminals who want to upgrade but don't want to spend a bunch of money doing it," Bird says.

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