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Table of Contents

Lead Story

A sense of community

News

Industry Update

SCA proposes alternative to end-to-end encryption

FIS acquisition of Metavante approved

Swiping at interchange reform

Will Google grab NAA micropayment business?

ETA poised for congressional return

Features

The importance of recession marketing

ISOMetrics:
The promise of community banks

Selling Prepaid

Prepaid in brief

Blessings of SaaS for campus card programs

A new drive for prepaid

Prepaid payroll helps Wal-Mart go green

Views

Summer musings on interchange

Patti Murphy
The Takoma Group

How to win a major bid

Ross Federgreen
CSRSI, The Payment Advisors

Education

Street SmartsSM:
Every little bit helps

Jon Perry and Vanessa Lang
888QuikRate.com

Telephone etiquette

Vicki M. Daughdrill
Small Business Resources LLC

ERR, a merchant retention tool

Bob Schoenbauer
Capitol Payment Systems Inc.

Need cash for your business?

Mark Dunn
Field Guide Enterprises LLC

POS forecast: Increasingly cloudy

Dale S. Laszig
DSL Direct LLC

Company Profile

UP Solution Inc.

New Products

POS payment and acceptance in a phone

ZeniusMobilePay and ZeniusMobilePOS
Zenius Solutions Inc.

Multipurpose bar codes

CodeZ QR
Computer Output Print & Internet

Inspiration

Just ask

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

September 28, 2009  •  Issue 09:09:02

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POS forecast: Increasingly cloudy

By Dale S. Laszig

The time has come for credit card terminals to go on a diet. Two decades of "binging" on fat applications have taken their toll. Appeasing our growing appetite for multi-applications by adding more memory to POS devices is no longer sustainable.

Besides, technology is changing so fast that some hardware platforms are pronounced obsolete before their applications have been fully tested and certified.

There's a growing awareness that what's new and hot today may be out of compliance tomorrow. How can we, as merchant level salespeople (MLSs), assume that the merchant solutions we sell today will be secure and future-proof tomorrow?

Here is the key question: How flexible and scalable are the networks, terminals and terminal management systems that we rely on today? Building and managing networks is an expensive proposition unless you decide to outsource, buying only what you need as you need it.

Cloud clarity

That's what cloud computing is all about. It is a logical response to on-demand consumerism. It takes us far away from "fat" enterprise access points (APs) into a new generation of centralized, browser-accessible software securely managed by remote administrators.

Some of the largest companies in the world have embraced this new paradigm: Amazon.com, Salesforce.com and Cisco WebEx are a few examples.

Cloud computing in the POS world can make changes to large populations of terminals instantaneously, without a single download. We've seen some cool tricks in the past, like the "call-home" feature that sends a message to a terminal, instructing it to call in for a software update when it delivers a batch of transactions to a processing host. This is more advanced than that.

In a cloud scenario, the host holds all the intelligence, and the processing platform stays thin and light, connecting to its brain through the Internet, or cloud.

Misconceptions about cloud computing abound, beginning with the cloud itself. Believe me, there's nothing in the cloud. It's just a symbol for the interconnected networks that data pass through from one access point to another.

Cloud computing security is also much debated, but before we join that fray, let's define some common terms.

Internet

The image of interconnected networks encircling the world inspired the term "World Wide Web," the moniker for the largest, most popular subnetwork of the Internet, a medium so enmeshed in our lives that we take it for granted, like the air we breathe.

"By the beginning of the 21st century, approximately 360 million people, or roughly 6 percent of the world's population, were estimated to have access to the Internet," according to the Encyclopedia Britannica. "It is widely assumed that at least half of the world's population will have some form of Internet access by 2010 and that wireless access will play a growing role."

Universal communications

Transmission Control Protocol/Internet Protocol (TCP/IP) is the Internet's universal language. The top layer, TCP, breaks the data into manageable packets; the bottom layer, Internet Protocol, manages the address of each packet, which is then accepted and forwarded from point to point to a final host destination.

Within the TCP/IP software suite, higher-level applications manage the nuances of file locating and sharing. Hypertext Transfer Protocol (HTTP) and File Transfer Protocol (FTP), when combined with Uniform Resource Locator (URL), enable diverse populations of devices to find each other on the Web and exchange data.

Safeguards like Secure Sockets Layer (SSL) and Hypertext Transfer Protocol Secure (HTTPS) create additional privacy and permission levels that enable bank account and credit card data to be securely entered and transmitted.

High-speed connections

Today we have more choice in the methods we use to connect to the Internet. Dial-up modems were the original connection method.

Modem stands for modulate/demodulate, a method used to translate analog signals transmitted over phone lines into digital signals, a less efficient practice than high-speed Ethernet packet-switching.

Ethernet, also known as broadband, is available over Ethernet cables, Wi-Fi and cellular networks. Broadband can interface with dial, as in fact many of our credit card terminals do, connecting over dial lines to networking hubs that convert dial transactions to TCP/IP.

Virtual office

MLSs who stay connected to remote corporate headquarters through e-mail, phone and fax might be surprised to know that virtual offices existed as far back as the 1980s. Before the Internet became widely popular, companies relied on paging devices and voice mail systems to stay connected to mobile workers.

Today mobile workers can log into their offices via laptop computers or smart phones and leave "bread crumbs" as they progress through the business day. This is enabled by smart phone tracking technology that registers arrival and departure times at various client locations.

Paperless office

By the early 1990s, e-mail began to surpass paper correspondence as a primary form of communication. Business owners began to visualize a "paperless office" capable of digitally transmitting and storing an array of documents and data.

While it's doubtful we'll ever achieve a truly paperless workplace, many ISOs have converted massive archives of stored merchant applications into digital files, freeing up office space and paving the way to "instant apps," which enable MLSs to sign new merchant accounts on laptops instead of paper.

Digital revolution

The digital remastering of a variety of media has made an enormous impact on the way we process information. Today we can mail letters; buy newspapers, books, CDs, DVDs; and rely on credit card terminals.

We can also access the data and functionality of these old standbys instantly and less expensively through our smart phones, laptops or home computers.

Computing and credit card processing systems have evolved with Internet technology and the digital revolution. Today's processing landscape is a patchwork quilt of intergenerational systems, all managing to communicate with each other in forward and backward compatible modes.

We've progressed from client/server standalone systems and fat APs. They are fat because their memory is stored locally, requiring more and more room for expansion as applications become larger and more complex.

High-speed routers called Network Access Controllers (NACs) manage transaction flow from wired and wireless credit card terminals. Effective NAC networks have bi-located facilities to protect against interruptions of service. Scalability is achieved by adding bus cards to chassis and adding chassis when you run out of slots. It also involves replacing hardware with newer generation NACs.

Terminals that store applications locally have grown as big as 24 megabytes to accommodate security compliance specifications and ancillary programs such as electronic check conversion and gift card applications.

The cloud value

Cloud computing presents a flexible alternative for managing transaction data and keeping terminal management systems from getting too fat. This broad category has three subsets: infrastructure as a service, platform as a service, and software as a service. Each offers a cost-effective alternative to large-scale legacy systems.

The value proposition of cloud computing is that you buy what you need when you need it. Services, managed remotely by professionals at centralized controllers, are easily accessible through Web browsers.

Managing capacity is as simple as adding or removing users. Updates are instant and unlimited. It's cost-effective and future-proof, but is it secure? Check back next month for a closer look at Payment Card Industry Data Security Standard compliance and cloud computing.

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

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Spotlight Innovators:

USAePay | Impact Paysystems | Electronic Merchant Systems | Inovio