By Dale S. Laszig
DSL Direct LLC
Judging from the viral growth of mobile banking and smart phone applications, mobile commerce may be the next big trend, with consumers using cell phones to transmit credit card data and merchants using smart phones to process credit card transactions.
Near field communication (NFC) technology, which enables the contactless POS, has been widely adopted in Europe. Deployment of NFC-enabled phones, an increasing population of contactless POS terminals, and various incentives offered by banks and card brands are driving demand in the United States and Canada for cell phone initiated transactions.
Using smart phones for credit card acceptance is a green solution and a great way for merchants to do more with less. Low-transaction mobile workers no longer have to carry and set up POS equipment to process one or two transactions. Smart phones can also capture swiped rates at the POS when paired with hand-held card reader peripherals.
With all the hardware models and software applications to choose from, how can merchant level salespeople (MLSs) help merchants decide on the best smart phone solutions for their businesses?
Here are seven rules of "celling":
Smart phone payment processing is not for everyone. Merchants who keep their mobile phones turned off except for emergencies are not good prospects. Merchants who have recently acquired a BlackBerry or iPhone should be given a chance to learn the basics before attempting to process payments on them.
Technically savvy merchants would be most receptive to adding a payment application to their smart phones, particularly if they want to accept credit card payments from wherever they happen to be working.
Not all smart phones are created equal. The innovative, consumer-friendly iPhone is great at many things, from streaming video broadcasts to texting, but its touch screen keypad may be cumbersome for a mobile worker who needs to type in a lot of data. Also, merchants who process payments on the iPhone will have to manually enter transactions until an iPhone-compatible card reader peripheral becomes available.
There's a world of difference between consumer mobility and business mobility. Enterprise smart phones are equipped with rugged carrying cases and longer battery life. Screens are easy to navigate, and keypads are designed for fast and frequent typing. Enterprise-worthy phones seamlessly integrate a variety of work-related programs. They can be used to track mileage, workers' hours and attendance, and delivery times.
This continuous flow of data can be used by management to evaluate efficiencies and create customized reporting.
It's not enough these days to ask if transactions are processed securely. Any application that manages cardholder data must be a certified Payment Card Industry (PCI) Data Security Standard (DSS) application. (For a complete listing of PCI DSS-compliant software applications, visit www.pcisecuritystandards.org.)
Merchants shopping for smart phone payment solutions can choose from applications accessed through Web browsers or downloaded onto smart phones. Smart phone Web applications have the same functionality for merchants as virtual terminals on computers; they're just in a slightly modified version to fit a smaller screen.
Web applications work well for merchants whose mobile workers log in from their phones to a browser-based processing application.
Downloadable applications for smart phones are more feature-rich than their virtual counterparts. Features like Store and Forward or the ability to view offline transactions are valued by merchants who process transactions in low-coverage areas. All smart phones require data plans sold by wireless carriers and their authorized resellers. Before adding credit card processing to a smart phone's menu of applications, make sure the application is compatible with the phone's operating system.
Examples of smart phone operating systems are Research in Motion Ltd.'s RIM OS; Sun Microsystems Inc.'s Java 2 Micro Edition; Microsoft Corp.'s Windows Mobile; Apple Inc.'s iPhone OS; and Palm Inc.'s Palm OS, Garnet OS and webOS.
To keep up with emerging technologies, carry a list of compatible smart phone models and card reader printer peripherals with you, and refresh it every week. That's how fast this technology is changing.
Many smart phones with touch screens can support signature capture, a valuable tool for merchants with chargeback issues.
Hand-held card reader peripherals communicate with smart phones via serial port connections or Bluetooth wireless technology. While all of these peripherals maximize swiped rates at the POS, all-in-one models with both card readers and printers provide thermal customer and merchant receipts. Confirm which smart phone models are supported by your help desk and processor and which peripherals can be paired with them.
Early adopters of smart phone processing technology need access to qualified support professionals as they integrate credit card acceptance into their daily business routines. They need to be shown not only how to operate the application and hardware peripherals, but also how to log on to a secure Web site to view real-time transaction activity.
It's best to work with value-added service providers who offer live chat and toll-free support numbers and are readily accessible to help your merchants get comfortable with their distinct user interfaces.
Intense competition has driven down the price of smart phone applications, which is good news for merchants. While you may not earn much on the hardware or software sale, these solutions will help you grow your portfolio by linking you to a whole new segment of the mobile merchant market.
The pricing model is similar to wireless credit card terminal pricing: an upfront investment in software license and activation followed by monthly gateway and incremental transaction fees.
Smart phones and peripherals can be clipped onto belts or slipped into pockets. They function much the same as laptop computers but with smaller screens and less battery power. They haven't replaced laptops; they've provided another access point to our increasingly virtual workplace. So now that you know the rules, R U celling?
Dale S. Laszig is a writer and payments industry executive with a diversified background in sales and marketing. Her company, DSL Direct LLC, helps industry professionals and business owners leverage electronic transaction technology. She can be reached at 973-930-0331 or dale@dsldirectllc.com.
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