Southwestern Advantage, a multi-level marketing company with a model similar to Avon or Amway, relies on college students to sell its educational materials — raising potential risk issues as a young and inexperienced sales force is tasked with protecting payment details.

To address any risk concerns, the Nashville-based company is deploying mobile acceptance technology from Roam on a white label basis. Southwestern will use a customized mobile attachment that will integrate with the company's electronic order system.

"By using a card reader we are keeping data more secure," says Brad Bohn, senior IT business analyst for Southwestern Advantage.

The students work during the summer, temporarily relocating and staying with host families. They show samples of the products during sales calls, and take orders. Mobile acceptance will allow the company to replace its previous practice of having the college-aged sales people use an interactive voice response system to call in sales and receive confirmation, Bohn says.

"Risk management was one of the primary factors in our decision to deploy mobile point of sale," Bohn says. "The information is not written down on a loose slip of paper for the dealer to call in later. The payment is immediately processed."

By turning a card-not-present transaction into a card-present transaction, the company gets more accurate payment data and reduces abandonment and chargebacks.

"The reader ensures the buyer is there when the transaction is being made," says Scott Holt, a vice president of marketing for Roam, an Ingenico subsidiary which has placed its mobile payments technology at a number of companies, including Cynergy, which combines mobile payments with sales tracking and other business tasks.

Southwestern's strategy combines one of the earliest models for mobile point of sale—the micro merchant—with emerging trend of outfitting a larger network of sales people or affiliates to accept mobile payments over a larger footprint. Southwestern's contractors come from all over the world and sell across most of the U.S.

Other mobile point of sale companies are also making similar deployments. For example, PayAnywhere, VeriFone, Intuit, Mophie and Sage have all provided their mobile card readers to various Boy Scout and Girl Scout troops for their popcorn and cookie sales.

"Network marketing solutions are a specific target solution regardless of the environment," says Rick Oglesby, a senior analyst at Aite Group.

The risk management benefits are also universal and can work beyond the student market, Oglesby says.

"[College students] may be a bit higher risk financially, but that's fairly easily mitigated in a variety of ways depending on how the business is set up," Oglesby says. "The mobile point of sale devices themselves are fully encrypted so it would be very difficult to use them to collect card numbers for fraudulent use. I actually would consider [the college market] to be no higher risk, and potentially even lower risk, than a process where anyone can walk into Walmart, pick up a dongle and start processing."

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