Monday, June 24, 2013
Apriva said the application also supports Internet protocol (IP) and wireless POS terminals, but its main selling point is the reduction in update download times for new dial terminal types from terminal manufacturers VeriFone Inc., Ingenico S.A. and Equinox Payments LLC.
Robert Martin, Apriva's Senior Vide President for Attended Merchant Solutions, said Apriva is able to achieve this dramatic download time reduction because the application architecture allows for "thin," less data-intensive downloads in comparison to the traditional way it is done. Martin said the app is analogous to how apps on smartphones are updated, with devices automatically checking for updates from app stores. "If it has updates, it sends them down automatically, and they're small enough that it doesn't hit my data usage," he said.
The traditional dial download method involves ISOs or processors initiating downloads remotely. Martin explained that not only do those updates routinely take 40 minutes to complete per terminal, but that the service provider has to maintain and support separate applications for each terminal family, as well as maintain and support "the terminal download center to each terminal manufacturer they support."
But the Universal App is designed to reduce that complexity significantly. Martin said the app allows for automated updates that occur as part of merchants' end-of-day batch settlement process. Further, the app is downloaded to devices from a central server over the Apriva Gateway. Instead of different app downloads for different terminals, the Universal App is one application pushing out updates from one update server to different terminals, Martin said.
The Universal App works with only the new terminals being deployed by the manufacturers. Martin listed the new terminals as the Equinox Optimum models, the VeriFone Vx and VX Evolution models, and the Ingenico Telium 2.
Martin noted that dial updates at one processor fail about 30 percent of the time. If updates are attempted in the middle of the night, then many times merchants arrive at the beginning of the next business day with terminals locked in the download fail state, which results in costly and time consuming calls to customer support, he said.
But even if updates are successfully downloaded, the average 40-minute download time is still a cause of merchant attrition. "I jokingly say that most merchants view the terminals as a necessary evil," Martin said. "As long as we can keep the emphasis on 'necessary,' things are good. You start telling them that they need to hang out for 45 minutes after close or, at the start of their business day [and] they can't take credit cards for 45 minutes at the beginning of the day, now you're starting to move the needle a little over to 'evil.'"
Martin believes the Universal App largely solves those problems. If a terminal has an update, it downloads it automatically, he said. "If not, it goes on its merry way," he added. "And if it does download, the download time being so small, it's not disruptive to the merchant business."
With innovative mobile payment solutions, like ones championed by Square Inc. and PayPal Inc., gaining traction in the marketplace, small merchants with dial terminals might upgrade to newer systems and leave dial – and their merchant providers – behind. But Martin said small merchants won't change if they don't have to; by reducing a merchant pain point, the Universal App can keep merchants using dial.
"In the terminal business, we haven't been really focused on innovation, as far as merchant options, really since the early 2000s," Martin said. He expects Apriva's new app will allow innovation to take place on the "dumb" terminals once again.
Since Universal App downloads are minimal in terms of data size, they can allow for other information to be pushed out to merchants as part of the updates, according to Martin. One such use is as an alternative to statement inserts for the delivery of incentive offers, for example. Martin said the rise of online banking has reduced the effectiveness of statement inserts (since no one scrolls down to the end of online statements to look for special offers); the updates can take their place and allow ISOs to explore new ways to communicate with merchants.
The Universal App can also be a way of getting merchants to upgrade terminals to new, Europay/MasterCard/Visa (EMV)-compliant ones, as the app-supported machines are EMV-enabled. Therefore, the app gives merchants a reasonable justification for making the costly upgrade to EMV, Martin said.
Meanwhile, a main benefit of the app to Apriva is that it also functions with Apriva's IP and wireless terminal configurations. Martin said ISOs can port entire portfolios onto the Apriva Gateway and get terminal updates pushed out from one source for any terminal configuration, thus making the app "an operational thing that would provide a broad benefit to ISOs."
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