A Consultant's View
Prairie Trail Software, Inc. ............................................................. September 2006
Terminal manufacturers want businesses to purchase new terminals and thus they pitch only their new, more expensive, terminals as IP capable. So, what can one do to reduce that cost?
There are ways to get an IP capable terminal other than purchasing a high end system; however, these solutions may not be suitable for every situation. As with most things, there are trade offs.
The least expensive solution means no debit transactions. For example, an on-campus meal card, where no PIN is entered, can use old Tranz terminals with a serial to IP converter. Several manufacturers offer serial to IP converters. Precidia has one that provides power to the Tranz terminal through the PIN Pad port, thus reduces the number of devices that are plugged in at the merchant site.
But watch out, not every serial to IP converter uses SSL to encrypt transmissions. Some were designed to operate only within the walls of a supermarket or other large establishment where transmissions would never go over the internet.
These solutions will work for cases where IP transmission is needed and you can control both the terminal software and the host software.
But, sometimes you can't control the terminal software. In those cases, replacing the phone line with phone to IP converter (a device that provides dial tone, answers the phone and converts the transmission to IP) will work. This is not as fast as a serial IP connection, but it is significantly faster than dialing out.
There are two types of dial to IP converters. One operates at the terminal level and converts phone calls to IP. Another operates at a concentrator area and converts multiple phone calls into IP. What to use depends on your need.
Finally, there is the "brute force" method of providing IP. One of our customers needed so few terminals converted to IP that software development costs would have been the largest expense of the job. In this case, we replicated the server at each merchant. The tranz terminal talked to a PC under the counter that was running the server, and the server talked IP over the internet to the SQL server.
If you need to run both credit and debit transactions, then IP capable terminals offered by the major providers are still the best way to go.
Although the weather here in Texas has finally dipped to a more comfortable range, IP based terminals are still hot. So hot that we've added another newsletter on them. Verifone is riding high by selling lots and lots of them, and everything they write demonstrates how great these terminals are. But what is the real market for IP terminals? They cost as much or more than a PC, so why do they exist? What's the hook?
The hook is not the terminal. It is the whole package of terminal, software, and services behind the terminal. The only reason to use terminals instead of PCs is that PCs are notorious for their viruses, worms, ad-ware, and spy-ware. Financial institutions have a measure of trust that terminals will hold their software and run the same day after day. The issue of trust is why Verifone and McAfee are working together to provide anti-virus protection.
But times are changing, trust is no longer limited to terminals. Other companies are working on ways to provide a similar level of trust to PCs. For that reason, more and more ISOs are providing PC based credit card transaction software–one ISO is using it exclusively.
When trust is no longer the hook, then form factor and design will remain the only reasons to go with a terminal over PC software. When countertop space is limited, and you can't add software to the cash register, a terminal is the only viable answer. Physical design can be a reason to go with a solution (as Apple has shown with their iMacs and iPods) but design is fickle. A design that was state of the art one year may be out of fashion the next.
University students have discovered a new way to attack cell phones. This new attack is built on the fact that cel phones can not do anything when their battery is dead. So, they attack the battery. The protocol for transmitting multi-media files to cell phones allows for phones to be woken up on demand. An attack simply keeps waking up a phone until the battery is dead. .
Dave Randolph,
President, Prairie Trail Software