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Wireless technology means credit card payments can
soar
By Jay
MacDonald • Bankrate.com
Looking for a business boost? Go
wireless.
Wireless credit card acceptance is about to revolutionize
the way businesses take payment. All the benefits of a truly mobile
point of sale (POS) terminal are finally here, thanks to newly affordable
technology and rapidly expanding cellular coverage. Depending on
your service provider, you can even skip the hardware investment
altogether and take plastic with your laptop, your PDA, even your
cell phone.
Wireless essentially initiates a credit or debit payment
transaction from a handheld or desktop POS device via one of the
several carrier networks that serve mobile telephones. Leading U.S.
wireless providers include Apriva,
LinkPoint
International, Lipman
U.S.A., MIST
and U.S.
Wireless Data.
Cutting the phone cord
Small businesses in particular stand to benefit from wireless.
Home services such as plumbers and carpet cleaners
can now take cards quickly and easily on the spot. Sales reps and
arts and crafts vendors can sell product in the field and at trade
shows. Livery services such as taxi and limo drivers can accept
that long-coveted corporate plastic.
Faster payment, better tips, increased customer satisfaction
-- these are just some of the reasons to cut the umbilical cord
with Ma Bell.
"Small, medium and large businesses, depending
on the wireless solution, can all benefit," says Joyce Leiser,
director of emerging markets for U.S. Wireless Data. "Whether
it's a fixed location or mobile, there is no need to wait for a
phone line installation to get your merchant accepting credit cards."
Charles Lee, CEO and president of MIST, agrees: "Wireless
is changing the model of how business is done."
10 reasons to go wireless
While the technology may seem like something right out of Star
Wars, the business case for wireless verses land-line-based POS
terminals is surprisingly straightforward and down-to-earth.
Here are 10 reasons to go wireless:
1. It's faster. Some industries, most notably
Quick Serve Restaurants (QSRs), have long steered clear of accepting
plastic primarily because the average required dial-up time of 20
to 30 seconds was deemed too slow for the fast food environment.
With wireless, you can now clear a credit or debit transaction in
the time it takes to ask, "Would you like fries with that?"
And recent changes in card association rules that allow merchants
to green-light card sales of less than $25 without authorization
further paves the way for wireless to enter the fast lane.
2. It's cheaper. "Right now, if you want
a second business line for a dedicated POS machine, you're looking
at about $60 a month," says Lee. "If you get a wireless
service, your communication cost will probably be $10 to $15 a month."
That recurring monthly savings can quickly make up for the extra
$200 to $250 hardware investment that a wireless POS will typically
cost verses a comparable hardwired terminal. After that, it's all
gravy. Some services enable you to complete transactions on your
PDA, laptop or even your cell phone.
3. It's portable. Certain industries, notably
taxi, limousine, delivery and home services (plumbers, carpet cleaners,
etc.), have wrestled for years with cumbersome scenarios to enable
drivers to accept credit card payments with mechanical "knuckle-cruncher"
machines. Others, such as merchants at sports and concert venues,
trade shows, craft fairs and the like, simply found it too risky.
With wireless, mobile merchants now can swipe a card, obtain authorization,
screen for fraud and print a receipt, on the spot and in real time.
4. It's safer. Wireless is safer in three fundamental
ways: it allows you to obtain real-time authorization, thereby reducing
fraud; it is nearly impossible to "hack" because it is
initiated free of land lines; and it reduces the amount of cash
that employees handle, which makes it safer both for customers and
businesses. Customers can even swipe the card themselves, maintaining
possession of their card throughout the transaction process.
5. It receives preferred rates. Unlike a mail
or telephone order transaction, a wireless sale is considered a
card-present transaction, meaning you get the lower preferred discount
rate from the card companies.
6. It speeds reporting. Say you are a small
gypsy cab company. It takes a considerable bite out of your operating
budget to tally receipts and pay your drivers after each shift.
If your drivers take plastic the old way, your dispatchers also
are probably losing productivity by phoning in transaction information
for the drivers rather than assigning cabs. With wireless, you can
go online, pull the real-time reports by cab and have the checks
waiting when the drivers clock out.
7. It can streamline timekeeping and payroll.
"A typical fast food restaurant has between 40 and 50 employees
that work various shifts, multiple odd hours here and there. How
do you keep track of people?" Lee asks. "With wireless,
you can give them a card or employee number, they can log right
on the terminal when they start and when they end, and you can log
onto the gateway when you do payroll and it can calculate all of
the tax deductions and everything for you."
8. It improves customer service. Because most
wireless services come with paging and text messaging features,
your mobile force can stay in touch with you, enabling you in turn
to stay in touch with your customers. If your delivery driver is
stuck in traffic and that guaranteed-or-it's-free pizza is going
to be late, you can call and assure the customer that this one's
on you. That way they don't pass the time getting angry with you
or your driver.
9. It can pump up your marketing. The value-added
potential of wireless is enormous and largely untapped. Let's say
Coca-Cola wants to print a one-inch coupon on the bottom of your
wireless receipts. With wireless, it's as simple as a download to
your mobile POS devices. Even better, you and your merchant processor
likely will split the proceeds for that valuable ad space, bringing
your processing cost even lower.
10. It can make your Web site take off. Small
businesses often feel out of their depth in e-commerce. You have
a Web site, but you're always too busy to check e-mail during the
working day so you haven't bothered to take advance orders online.
A good wireless gateway can "push" orders from your site
to your wireless POS terminal. Result: more sales, happier customers
and great word of mouth. "It provides the small guys with big-store
types of capabilities," says Lee. "If you were Sears,
you could develop your own Web site and have this complex e-commerce
solution, but if you have one or two stores, it's tough for a small
business to do that effectively."
Bottom line: Mobile wireless point of sale processing
is here, it's affordable and it could be a big time- and money-saver
for small businesses on the go.
Jay MacDonald is a contributing
editor based in Florida.
-- Posted: July 24, 2002
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