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The Green Sheet Online Edition

August 13, 2007 • Issue 07:08:01

On queue: Self-service card payments come of age

By Paul Rasori

Self-service vending devices that accept cash and coins have been available for over 100 years. But until recently, do-it-yourself bankcard payments have been limited to pay-at-the-pump purchases in the petroleum marketplace. Automated, interactive kiosks have now migrated to ATMs located off bank premises. They are part of an emerging market that may not change your life overnight, but it certainly bears watching.

Unattended card payment terminals have shown up in a variety of environments, including parking garages, vending machines, photo kiosks and event ticket sales, as well as supermarket checkout lanes.

Choosing convenience

Retailers report that self-service payment options are embraced by all customer segments and demographics, from elderly pensioners to young technophiles.

Consumers are voting with their wallets for expediency, ease of use and freedom to choose the time and place best suited for shopping. And their endorsement is not solely limited to low-value transactions. In some regions, even high-value goods, such as mobile phones and MP3 players, are sold through vending machines.

Self-checkout options have been shown to generate a 40% reduction in average queue times, with increased throughput of up to 20%, enabling retailers to effectively cope with peaks and troughs of demand.

Seeking to increase the ways consumers can obtain goods and services, many companies are investing in their ability to take secure payments in unattended environments and deliver enhanced 24/7 self-service options.

Making the grade

In a self-service environment, card payment terminals must be intelligent enough to handle a range of payment options: credit, debit, gift or prepaid cards, for example. Terminals must differentiate between each payment card type and prompt users appropriately through transactions. Stand-alone systems must meet all security, reliability and performance standards of everyday countertop payment systems, plus unique requirements based on their usage and environment.

Most self-service POS equipment's core technology usually integrates a card reader and a secure keypad for PIN entry. Other components, such as a display, receipt printer or communications module, may also be installed, depending on the needs of individual equipment vendors.

While installing card acceptance technology in self-service equipment gives consumers flexibility, it also exposes vendors to potential fraud from stolen or duplicated cards. This requires mechanisms to authenticate cardholders and their payment cards.

Designing for PCI

Unattended payment systems with PIN pads must adhere to Payment Card Industry (PCI) Data Security Standard requirements specific to unattended PIN entry environments, known as PCI EPP.

Design is an important consideration in choosing a keypad. For outdoor environments, a waterproof or weatherproof design may be desirable. Ruggedness and vandalproof features may also be needed. The zone of security surrounding the keypad (which prevents others from seeing a user enter a PIN) is also critical. Finally, accessibility is a must. This factor will determine the size of the keys well as area lighting and keypad illumination.

A communications module can be used for a number of different tasks. It can authorize and settle card transactions directly with a bank; it can send card details to a POS controller that then handles bank communications; or it can download new software or settings to the payment terminal.

If a self-service machine is located on a merchant's premises, such as in a pay-at-the-pump or in-store kiosk setting, it usually makes sense for the communications module to have a fixed-line configuration such as a serial cable or a local area network connection.

For a remotely located self-service machine, such as a vending machine or photo kiosk, a fixed line may be difficult to install. Thus, a Wi-Fi, general packet radio service (GPRS) or code division multiple access (CDMA) wireless link may be more appropriate.

Thwarting crime and grime

Vandal-proof characteristics are important for payment terminals that will be used in public areas where full-time security is not provided. Self-service equipment in these locations needs to withstand a good deal of abuse without breaking down. While it is almost impossible to develop a device that will resist an attack from a determined vandal, downtime can be minimized by using strong materials, a rugged design and an effective alarm system.

Tamper-proof characteristics can keep confidential payment card information (PIN, card number and expiration date) secret from those intent on stealing it. If someone tries to open or tamper with a PCI-certified terminal, for example, it will disable itself and destroy all of its secure information, including encryption keys and transaction data.

In locations where terminals are exposed to adverse environmental conditions, the design and materials used will typically prevent water and dust from entering the machine's body. Devices that endure extreme hot and cold temperatures may also have special electronic components to make certain they do not break down.

VeriFone expects the unattended payments sector to grow rapidly. As this market spreads, sales and distribution strategies will have to adapt. Pay attention to this area, so you will be poised to take advantage of it. end of article

Paul Rasori is VeriFone Vice President of Global Marketing. He can be contacted at paul_rasori@verifone.com.

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