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Table of Contents

Lead Story

Mission: ETA


Industry Update

Make a mark, take a stand

Mobile commerce popular, NFC lagging

Accepting payments, iPhone style

Antisocial online networking: ID theft

Aite busts merchant retention myths


Miles Mulcare

Growth in payment risk can be mitigated

Eston Fain
AQ2 Technologies

Selling Prepaid

Prepaid in brief

Virtual gift cards given a twist

GPR cards and reload networks: A complex relationship

Continental Prison Systems Inc.
The 'get out of jail' card


Regulation, deregulation, self-regulation

Patti Murphy
The Takoma Group


Street SmartsSM:
Go ahead, work some magic

Jason Felts
Advanced Merchant Services Inc.

Work/life balance, an employers' issue

Curt Hensley
CSH Consulting

Think outside the converter box

Dale S. Laszig
DSL Direct LLC

How to win back e-mail jilters

Nancy Drexler
SignaPay Ltd.

Get what you want from your staff

Vicki M. Daughdrill
Small Business Resources LLC

Get what you want from your staff

Vicki M. Daughdrill
Small Business Resources LLC

Steer clear of buyout pitfalls

Adam Atlas
Attorney at Law

Company Profile

Velocity Merchant Services

Metro Merchant Services

New Products

The 21st century signature

Company: ElectraCash Inc.

Taking a cue from teens

Smart Transaction Systems Inc.


Just say no to bootstrapping



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

March 23, 2009  •  Issue 09:03:02

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New Products

Taking a cue from teens

Product: Text-2-Transact

A new service from Smart Transaction Systems Inc. has taken a popular practice among teenagers and made it into a payments platform. Text-2-Transact enables mobile merchants to process gift and loyalty transactions through cell phone text messaging.

"It solves the problem of having to distribute relatively expensive wireless terminals out to a vendor," said Ray Clopton, President, STS. "Instead they can just use their cell phone as a terminal."

Clopton said the system, which was introduced in February 2009 and works with any cell phone that has text messaging (no download required), functions the same way as a mobile POS terminal, except it lacks a paper receipt function. But he added that merchants do receive a mobile receipt (also text-messaged) at the end of a transaction, and that customers who register for the service can receive one too.

He said the service is intended for both mobile merchants, like pizza delivery outfits and farmers market vendors, as well as "multimerchant programs." Regarding the latter, Clopton used the example of a shopping mall where "if you've got a lot of different merchants that accept the same card, ... we'd say if you're a small store and you don't see too many of the mall gift cards coming in, you can just use Text-2-Transact."

Quick and easy

Text-2-Transact functions through an interfaced network between STS and the cellular companies (Clopton said all the major telecom providers are participants).

A merchant texts three separate numbers - first a code indicating the type of transaction, then the gift or loyalty card number and finally the sale amount - before sending the message by a special sending number. The text first goes to the phone company and then is routed to the STS gateway for processing.

From there, STS sends a response to the merchant's phone (and simultaneously the customer's, if he or she is registered with Text-2-Transact) approving or denying the sale and listing the purchase information as a receipt. A test of the service found the back-end processing took about 10 seconds, similar to the speed of a normal POS terminal transaction. Clopton pointed out that the texting itself was no less efficient.

"In most cell phones you can switch between numeric mode and alpha mode, so they just stay in numeric mode, and they can do the whole transaction without switching," Clopton said. He noted the service is restricted to prepaid and loyalty card programs to limit the security risk of using unencrypted phone networks.

"With the gift card it's typically a one- or two-use transaction, so the average value on a gift card is typically about $40 to $45," he said. "We're sending them out over the cellular networks, and it doesn't have the type of encryption you'd want to use with a credit card transaction.

"So somebody could potentially figure out somebody's gift card number, but the incentive for fraud isn't really there. They'd have to work pretty hard for that $40."

Smart Transaction Systems Inc.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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