SageNet
Overwhelmed With WAN? Call the Experts
Buzz about high-speed fast food transactions at the point of sale involves a host of acronyms. Along with "POS", we have "IP" for Internet protocol, "WAN" for wide area network, and let's not forget "QSRs" for quick service restaurants.
These all come together when ISOs and merchant level salespeople (MLSs) want to provide merchants with high-speed transactions at the POS, but how much will they actually need to know about implementing these types of solutions?
A salesperson's specialty is selling, not technology implementation, so leave that to the experts, such as the people at SageNet.
SageNet is a systems integrator that focuses on the distribution, configuration, installation and support of information technology (IT) and electronic financial transaction products in multi-location retail establishments. It delivers end-to-end, one-stop solutions for IP credit transactions.
The company, founded in 1998, has evolved from its 1999 merger with Global Services Inc., a Tulsa, Okla.-based services company founded in 1992. SageNet has more than 80 employees across three locations; 2004 sales volume totaled nearly $20 million.
SageNet is a jack of all trades when it comes to IT services. The company provides customers with everything from broadband circuits, network hardware, network monitoring, POS hardware, computer systems, desktops, servers, laptops, tablet PCs, cabling, WiFi solutions, onsite installation and problem resolution, to VeriCenter programming and IP downloads, Class-A support for VeriFone Inc. IP terminals, remote polling software and even video surveillance equipment.
SageNet got its start working with major companies such as MCI/WorldCom, servicing PCs, printers, servers and other hardware and building private networks.
Its partners today include IBM, Cisco, Hewlett-Packard, Microsoft and VeriFone Inc. However, a program with US Beef Corp., which operates more than 250 Arby's Restaurants in the Midwest, put SageNet on the map as the go-to company for installing WANs and IP-based POS systems at QSRs.
"There's really no place an ISO or processor can go to do a complete installation and provide total support for the merchants," said Dale Higganbotham, Vice President of Sales for SageNet.
"Someone has to qualify the stores for broadband, design the system, install it and support it. There's all that work that has to be done, and most ISOs and processors don't know how to do that. We've been working on the payment processing side of the business for the last few years, and there are certainly others who provide various pieces of what we do, but we are the only ones who provide it all," he said.
Making Quick Service Quicker
SageNet is now helping a growing list of QSRs implement WANs for processing high-speed, IP-based credit cards at the point of sale. In addition to US Beef, SageNet's customer list also includes Taco Bueno and Mazzio's Italian Eatery.
A WAN is a communications network that covers a large geographic area (usually greater than a mile). The largest WAN in existence is the Internet. WAN traffic can travel via the Internet, the public telephone network or a private network, which allows the secure exchange of files and data over great distances. Many QSRs use WANs to connect the corporate office with its chain of restaurants, but merchants can also use a WAN to process IP-based card transactions.
Some of the benefits QSRs realize by implementing a WAN include improved customer service with faster check out and more payment options; increased revenue with larger average ticket size and use of electronic loyalty programs; decreased expenses with a reduction in merchant processing fees and long distance costs; and streamlined business processes.
US Beef piloted credit cards as a payment option in the restaurants, but wanted to decrease transaction times to improve its customer service and convenience. The company decided to replace dial-up connectivity with high-speed, IP-based connectivity in its restaurants. To get the job done, it hired SageNet as a network integrator.
Despite its level of expertise, this was no simple undertaking for SageNet. US Beef required that each Arby's location be connected to the corporate office in Tulsa in order to transmit daily reports on sales and inventory. SageNet had to review each Arby's and determine the best available technology for that location, then integrate it with the WAN. Ultimately, SageNet worked with 12 communications companies to develop the network for US Beef.
Mazzio's Italian Eatery, a chain of 140 restaurants in Oklahoma, Arkansas and Missouri, hired SageNet in 2004 to convert its existing in-store POS terminals and centralized call center application from dial to IP for making credit and debit transactions.
Not only did the company benefit from improved customer service, but it also decreased its credit card processing fees by $60,000 a year using a network-based system as opposed to a dial-up system. It also eliminated one business phone line in each restaurant, which saves the company about $40,000 a year.
"IP is much cheaper and faster when the network is built properly," Higganbotham said.
Mazzio's uses VeriFone's Omni 3750 IP-enabled POS terminals in many of its stores and has cut transaction speeds from 20 to 30 seconds to three seconds.
Another QSR using VeriFone terminals for its IP-based POS transactions is Taco Bueno, a Mexican food QSR founded in 1967 with more than 130 locations in Texas, Oklahoma and Kansas.
In 2003, Taco Bueno launched a pilot program using dial-up credit card POS terminals to accept card-based payments. During the pilot, customers who paid with cards spent $2 more per meal on average compared with those who paid with cash; however, this slowed transaction times by 10 to 12 seconds.
Speed of service became a major issue suddenly, so the company turned to SageNet. Implementing a WAN, SageNet connected Taco Bueno's restaurants to the corporate office through an IP network; it also replaced the dial-up terminals with VeriFone' Omni 3750s in late November 2003, completing the job in January 2004. By using the VeriFone terminals, it "allowed us to pick the best of the broadband technologies for each of the stores," Higganbotham said. "We used a mix of private DSL, VPN DSL and frame relay."
The final result: Each Taco Bueno store had a POS terminal at the drive-through window and another at the front counter. Transaction times were reduced to two to three seconds from "swipe to tear."
Nothing's Perfect
Along with the complexities of using new technologies come many headaches, especially for people who don't understand how everything works.
"Today there are a lot of issues with IP systems going in and not working," Higganbotham said. "I think that's where we bring a lot of value to these ISOs and processors. In the dial world, things are a lot simpler. It's either the line or the terminal.
"In the IP world, it can be any number of things. If it's not the terminal, then it's the router. Or it's the switch, patch cord, communication line or any number of things. Although, if something's not working, it's not usually the terminal, it's the network. We understand the kinds of questions to ask and how to diagnose what's actually happening," he said.
SageNet also provides merchants with help desk services for the technical side and payment side. "It's one thing to get the system set up, but then you have to support it," Higganbotham said.
As a systems integrator, SageNet works with the merchant, processor, terminal manufacturer and ISO. "We are the one company that can provide a total solution from broadband circuits to the network and datacenter hardware, POS products, cabling, on-site services, network monitoring and Class-A terminal support," he said.
Although SageNet does not yet sell its services through ISO/MLSs, it is in discussions with processors and ISOs to do so. Higganbotham said SageNet would pay commissions on the initial installation for products and services with compensation for the residual fees such as managed broadband circuits.
"The biggest thing we have to bring to the table for ISOs is our knowledge of IP networks combined with the whole payment process," Higganbotham said. "Understandably, an ISO or processor doesn't really have that skill set; they're not in that business."
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Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.
