By: Joe Radest
Being a native New Yorker, I love returning home to visit family and friends. One of the dining spots we hit as a family is your common diner there. So many options on the menu, from breakfast to seafood dinner and everything in between and all very good! Sometimes reading the menu can cause indecision, what do you select for dinner?
While eating at a diner offers choices, in business sometimes we are offered too many choices or simply do not understand the wide range of choices which in the end creates a similar indecision, what do you choose?
When I got into the payments industry (90s) the point of sale solutions were very narrowed. You could simply run a countertop terminal that connected via phone line. That terminal could support from a retail business to commercial warehouse all the way to the business selling beanie babies online – remember those?
Today – the choices, well there are many. Not only are there many device choices but do you want them to be:
• Countertop – stand alone
– IP enabled
– Land line phone enabled
– Wireless (WIFI or Cell (4G)
• Integrated – with your software management system
• Website – ecommerce
• Mobile – reader connected to phone/tablet
• Virtual – online
How about the payment types?
• Mag stripe read
• Chip cards
• NFC (near field communications) – Apple Pay for example
What is the right fit for your business? It truly depends on the nature of your business. For example:
• Do your customers coming into your place of business place an order?
• Are they a recurring customer?
• Is your business more online sales based?
• Do your customers pay a deposit with balance due at time of service/delivery/etc.?
• Are they on an installment payment plan?
The questions above will steer you down paths that will determine what type of payment device/solution will be an ideal fit for your business. The key here being that hopefully your merchant service and/or software management solution provider is asking you these questions. No different than how you ask your customers what they are in need of? Determine their want and/or needs.
I would caution against selecting a point of sale device that looks great, sounds even better but not fit your business. Over the last several months I have been asked about the new chip cards (AKA – EMV). As my last article mentioned there is plenty of news on EMV but what is not known as well is the slow rollout of the cards by the card issuing banks. For quick understanding, take a look in your own wallet, how many cards have a computer looking chip on the front side of them? If the number is 1 or less, congratulations you’re with the majority of the population experiencing the slow transition to chip based cards.
The benefits of EMV will essentially be added security for both the cardholder and the merchant accepting them. When the cards are fully implemented, customer will dip the card into the slot on the POS device (yes does require device to read chip cards) and will need to enter a pin number to authenticate. In doing such – customer has validated sale. The merchant receives fraud protection from the card issuers. While EMV will stem misuse of cards at the counter/table they will not work for any card transaction that is considered keyed entered. That would be typed in whether in store, office, truck, or online. EMV is not applicable for not-present card transactions. So the quick thought process here – if your business is heavy on taking card transactions that are keyed one way or the other – then moving to an EMV device is a complete waste of time and financial investment.
How about NFC?
I can pay with my phone; just wave it in front of your payment device! I saw the guy in front of me buy his Grande Pike Place coffee @ Starbucks using his phone. Yes – NFC is great for that. Convenient, fast and secure. The downside is if your business is heavy on the key entry of cards – similar to EMV, do not consider them! If your business is card present, NFC could offer possibilities but I would encourage deeper dialogue with your payments professional on it. The real question here is how many users are enabled for mobile payments today? As Apple Pay only is available on iPhone 6 models, that is a narrowed market of users and most i6 phone owners have not even enabled Apple Pay. So the user base is narrow. The same goes for other mobile wallets – MCX, Google and soon to be Samsung. In a nutshell – NFC is legitimate but the user base is still in its infancy.
As for integrated solutions, the critical question will be how or who your software management system connects to for the payment gateway. I understand this is a vague and somewhat loaded question ironically. The reason – software vendors can have their systems API connected to more than one payment gateways. Depending on the gateway, it will determine what type of counter device (payment facing) you will be able to have or choose from. It is worth having a discussion with them on what devices they will be able to support that can take the chip cards and possibly phones (NFC).
The last but not the least is virtual terminals and payment gateways that handle ecommerce transactions. A virtual terminal is web based and similar to online banking, you go to a website and login. Once logged into a virtual terminal, you can handle card and possibly ACH transactions. With respect to ecommerce, you will need to determine what shopping cart you are using so it can be match up to certified payment gateways. That will make the process of connecting a payment gateway (checkout) simple.
Returning to the menu experience at a diner, there are many choices. This article is meant to provoke questions on your part to your payments processor and/or software vendor to determine what choices you have. Like sitting at a table and asking your server, what is good on the menu, a bad question is one that is never asked! You will never know what your choices are! SVBS
Joe Radest started his career in card payments in 1998 working for the industry giant First Data. Since FDC, Joe has worked with other notable processors – TSYS, Global Payments and Chase Paymentech. Nearly 3 years ago, Joe branched out on his own; providing complete end to end business process management and secured payment technology solutions, which affords business clients the ability to securely transact payments without having sensitive data touching their environment. He can be reached by phone at 770-731-0414 or by email at [email protected]