By Dale S. Laszig
DSL Direct LLC
What is a thin client solution, and how can it help merchants and merchant level salespeople? The term "thin client" originated in the computing world. It describes an environment in which most of the intelligence (data) is stored at a network instead of locally on a computer.
Similarly, a thin client credit card terminal is essentially a dumb device. It doesn't store data and is managed remotely by a gateway or financial host processor.
The increasing popularity of Internet technology has created an array of thin client solutions in payment processing. These Web-based tools offer flexible, cost-effective ways for ISOs and processors to manage large populations of devices.
Here's a look at how some thin client solutions are helping to streamline efficiencies and expedite our sales-to-activation process.
Many early model credit card machines didn't have enough memory to store transactions. Some of them were authorization-only devices; others would send electronic transactions to a host processor where they would be stored and automatically settled.
Many of today's retail merchants rely on host-based systems because they value their built-in redundancy. Authorized transactions are safely stored at a processor's host. They offer protection from fraud because anyone hacking into a terminal in such a system would not find any cardholder data.
Also, missing transactions do not require manual re-entry, a process that is both time-consuming and costly because key-entered transactions carry higher discount rates.
Today we have many kinds of built-in redundancy to help merchants manage transactions. In addition to legacy host-based systems, newer generation gateway companies manage transactions for a variety of devices, including dial, wireless and IP-enabled credit card terminals.
Sometimes called "middleware," these transaction switches manage the flow of data between terminals and processors, encrypt and truncate credit card numbers to ensure compliance with industry security guidelines, and offer a variety of real-time reporting to merchants and ISOs to help them track activity and analyze trends.
As anyone who has been involved in portfolio conversions can tell you, it's not easy to move thousands of merchants to a new credit card processing platform. No one likes change, least of all our merchants.
Whether new security regulations have made it imperative to upgrade equipment, or a new processor agreement has been finalized, it's a challenge to motivate thousands of merchants to download or exchange their credit card devices. Conversions can be massive undertakings; invariably some attrition will occur along the way.
Wouldn't it be great if you could sidestep the entire conversion process? That's the value proposition of working with a gateway, whether it's your own or a third-party, processor-neutral gateway.
ISOs can use a gateway to point their merchant transactions to a new financial host processor. Merchants will be spared the inconvenience of downloading or swapping out their terminals. The application and the look and feel of everyday credit card processing will remain the same.
Today's mobile merchants come in all shapes and sizes, including consultants who process on-site orders, service providers, delivery people and companies in need of wireless terminals for special events.
Whether full time or seasonal, these merchants need reliable mobile technology to keep their businesses moving forward.
Most mobile devices are thin client solutions. Transactions are routed through secure Internet gateways, which provide an additional layer of redundancy. Managers can view incoming transaction data from remote mobile devices on secure Internet sites and organize that data into a variety of reports.
Signature capture is gaining popularity with mobile terminals, further protecting merchants from chargebacks by including an image of a cardholder's signature with the record of each authorized transaction.
As the Internet has become increasingly embedded in our daily lives, we've seen a proliferation of virtual terminal applications. Many MO/TO merchants who don't process card present transactions have no need for stand-alone, POS devices and prefer to use Web-enabled interfaces.
Increasing demand for virtual terminals has led to a series of value added features, such as recurring billing, gift and loyalty applications, automated clearing house processing, bill presentment, and private-label solutions that prominently display merchant logos and branding on their Web terminal applications.
Virtual terminals are thin by nature because current industry guidelines restrict storage of cardholder data. Solutions that offer recurring payments use an abbreviated, encrypted reference to the original credit card data to meet industry security guidelines.
Web interfaces are dramatically changing the look and feel of integrated POS solutions. For the first time, it is possible to add complex functionality to simple, low-cost cash registers by creating thin client solutions that are managed from remote locations.
There are many benefits to this approach, particularly in high-traffic, high-volume multilane areas. Equipment failures are not catastrophic because the cash registers themselves are dumb devices that don't store any data. Application enhancements and upgrades can be managed remotely, and the register will simply pick up the update the next time it communicates with the central host processor.
Fraud is less of an issue because no sensitive credit card data is stored locally on the device. Multilocation retailers can change a message on cash register receipts in all lanes and locations with a few key strokes at corporate headquarters.
Thin, integrated POS systems are more affordable than their traditional counterparts because they don't require expanded memory to manage large databases or interface with other operating activities such as inventory and menu items. All data is managed remotely.
No matter what kind of solution you are selling, chances are there is an opportunity to make it thinner and more appealing to your merchants. Whether they need wireless, virtual, traditional dial or Internet-enabled processing systems, let's demonstrate the value of what we can do for them remotely to safely, securely and profitably manage their transactions.
Dale S. Laszig has a varied background in sales for First Data Corp., Hypercom Corp. and VeriFone. Her dedication to technology, writing and graphic design led to the formation of DSL Direct LLC, a marketing services company geared toward payment professionals. She can be reached at 973-930-0331 or dale@dsldirectllc.com.
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