he payment industry is changing rapidly. New wireless solutions designed for mobile merchants not only represent a large portion of the changing landscape, but they're also helping MLSs tap into new areas of opportunity.

For instance, any currently installed wireless terminals will need to be replaced within the next couple of years as Cellular Digital Packet Data (CDPD) networks are replaced with new wireless networks based on Code-Division Multiple Access (CDMA) or General Packet Radio Service (GPRS) technology.

That represents a 100% turnover opportunity, not to mention the new market opportunities created by solutions that deliver transactions in less than five seconds.

The Wireless IP Revolution

The introduction of Internet Protocol (IP)-based technologies at the point of sale is arguably one of the most important technological advancements to touch the payments industry in the past few years.

This technology now extends to the wireless world. It offers significant benefits to a broad spectrum of retailers and opens the way to targeting several discrete market segments, for which the benefits of mobile transactions are particularly attractive.

Providing portable payment solutions designed for environments that have a genuine need for secure, wireless and even remote transactions will unlock new opportunities, especially in markets where landlines aren't available.

The challenges confronting truly mobile, wireless terminals have now been surmounted. Today, many retailers are taking advantage of a new generation of high-performance, totally secure, portable payment solutions that are changing the face of the payments industry. The versatility of open IP-enabled wireless networks provides significant advantages; retailers and service providers alike can enjoy a flexibility of choice, selecting whatever next-generation packet-based data network suits their needs and requirements for coverage-CDMA or GPRS.

High-speed data networks offer faster and more efficient processing of transactions than legacy CDPD solutions; transaction times over an IP-based data packet network average 2 to 5 seconds, in comparison to the 15 to 30 seconds or more found in traditional mobile environments.

In addition, the 'always on' capability of IP eradicates the time consuming connect process and offers significant advantages to market segments where speed is king.

Additionally, TCP/IP protocol enables the overlay of a Secure Socket Layer (SSL) capability, providing point-to-point security that begins at the terminal and ends with the acquiring host.

So, regardless of how many Virtual Private Networks (VPNs), cellular or open networks the transaction proceeds through, the transaction is totally secure.

This makes IP-enabled POS terminals the ideal choice for mobile merchants, including restaurants, take-out businesses, taxi services, home sales, fairs and conventions, stadium and arena sales, airport or mall vendors, resorts and temporary lanes opened by traditional retailers.

Indeed, IP-technology can act as a catalyst for new POS solutions that provide rapid returns for payment service providers and retailers alike.

Delivering Advantage to Retailers in Ecuador, Brazil and Wisconsin

Let's look at a few real-life examples of early adopters of wireless technologies from around the world.

In rapidly developing economies, many new retail establishments are implementing wireless technologies and generating new types of significant savings for retailers.

In South America, the San Marino Mall in Ecuador is the first in the world to take advantage of the Wi-Fi (wireless Ethernet) 802.11b standard to deliver fast, secure transactions to more than 250 merchants and their customers.

There are other environments where mobile wireless terminals have a valid application. In many parts of the world, large sections of the population have no access to banking services because they are in remote or dispersed geographies.

With portable wireless devices, it becomes possible to deliver banking services without the need to invest in the same infrastructure that exists for the delivery of such services in urban environments.

Wireless terminals are now operational in open-air markets, which typically don't provide telephone or power lines. Cash and checks are usually the only payment options; or vendors will use 'knuckle-busters' to capture credit card information, and without online authorization, fraud is a fact of life.

The new service extends the convenience of electronic payments to a market segment traditionally excluded. Vendors can now process debit and credit transactions using portable terminals that complete transactions in less than three seconds.

In Brazil's largest open-air market, real-time transaction functionality has already paid dividends by reducing fraud at the point of sale; one kiosk owner reports savings of more than $400 in one month, attributed to a reduction in fraud.

Wireless technologies are also gaining strongholds in larger, established economies. In North America, the state of Wisconsin uses VeriFone Omni 3600 wireless payment terminals to process electronic benefits transfer (EBT) cards at Fondy Farmers Market in Milwaukee.

Vendors can accept electronic food stamp benefits in exchange for fresh fruits and vegetables, making it easy for low-income families to include healthy foods in their diets.

Open air and other traditional markets are no longer off-limits to those benefiting from card-based payments. By using robust CDMA-based wireless technology, merchants can deliver fast, secure and reliable transactions to their customers.

New Payment Horizons

While the concept of leveraging IP technology for payments is still in its infancy, manufacturers have already introduced the first fully IP-enabled terminals.

As the price of wireless terminals falls, and the rollout of broadband communications accelerates, there will be a massive movement toward these devices.

When the right providers partner to deliver the best possible solutions, wireless-enabled terminals will become more and more mainstream; the expectation is that they will achieve a 30% to 35% acceptance rate among retailers.

The future for mobile payment terminals looks to be exciting, with plenty of golden money-making opportunities.

Michelle Graff is Director of Global Marketing for VeriFone.