erms such as TCP/IP, WiFi and Ethernet are being used more and more when describing small merchant communications. Following is a brief summary of terms that apply to the emerging use of the Internet for authorization and delivery of services in the merchant bankcard industry.

Ethernet - Ethernet is a standard for network communication using either coaxial or twisted pair cable. Most widely used for LAN communication, Ethernet typically runs at 10 megabytes per second (Mbps), although newer systems use 100 Mbps or even greater than a gigabit of transfer speed. Corporations install Ethernet to manage LAN communications traffic for data and Internet.

Ethernet is the IEEE standard 802.3 and has several different 'flavors,' with the original Ethernet designated as 10base5. The '10' stands for 10 megabytes per second. 'Base' is the Baseband communications it uses. The '5' stands for a maximum distance of 500 meters to communicate. The versions of Ethernet include 10Base-2 (10 Mbps, 200 meters), 10Base-T (10 Mbps, 100 meters, twisted-pair) and 100Base-T (100 Mbps, 100 meter, twisted-pair).

Ethernet Base-T - Ethernet, originally designed to operate over a heavy coaxial cable, was later updated to support thinner and lighter types of coaxial cable as well as twisted-pair wire. Many buildings were already wired with twisted-pair wire, which could not support the requirement for high-speed networks that ran over coaxial cable.

Installing a coaxial-based Ethernet network into these buildings would require costly rewiring. Therefore, a new network type known as 10Base-T was introduced to enable the use of existing twisted-pair cable. Many stand-beside payment systems such as those used in grocery stores use twisted-pair wire.

10Base-T utilizes Category 3 (or higher) Unshielded Twisted Pair (UTP) cable in a star topology where each node on the network has its own cable run back to a common hub. Each of these cables can run up to 100 meters (330 feet) in length.

SSL - Secure Sockets Layer (SSL) is a protocol developed by Netscape for transmitting private documents via the Internet. SSL works by using a private key to encrypt data that are transferred over the SSL connection. Both Netscape Navigator and Internet Explorer support SSL with many Web sites using the protocol to transfer confidential user information, such as credit card numbers and other sensitive information. By convention, URLs that require an SSL connection start with "https:" not "http: ."

Protocol - All communications between devices require that each device agrees on the format of the data being transmitted. The set of rules defining this format is called a protocol. At the very least, a communications protocol must define the following:

• rate of transmission (in baud or bps)
• synchronous or asynchronous transmission
• half-duplex or full-duplex mode data transmission

Internet Transaction Terms

Following are terms regarding the use of the Internet for transaction authorization and delivery of value-added services.

TCP/IP is an abbreviation for Transmission Control Protocol/Internet Protocol, a suite of communications protocols used to connect clients and hosts on the Internet. TCP/IP uses several protocols, with the two main ones being TCP and IP. TCP/IP is the de facto standard for transmitting data over networks.

IP is responsible for transmitting data from one network location to another. The common term for a network location is 'address' with each system, host and client on the Internet having an address. This address is called an IP address, and there are two formats for an IP address. Internally, each computer system uses an IP address that is composed of four numbers, usually written in the format of 198.137.231.1. The second is the address we use to address an Internet site such as "www.ingenico.com ."

TCP protocol provides a virtual connection between two systems and guarantees that the information being transferred, called "packets," is successfully passed between the systems. TCP will retransmit packets that are dropped, because of some network problem and will ensure that the packets are received in the same order that they are sent.

This is important since there can be multiple routes that a packet takes while traversing the Internet. TCP also ensures that each packet received by the application has exactly the same content as when it was originally sent. If a bit has changed or dropped for some reason, TCP will detect it and re-transmit the packet. SLIP (Serial Line IP) and PPP ( Point-to-Point Protocol) enable information to be sent over dial-up lines using IP. Both take IP data and package it for transmittal over modem dial-up lines.

PPP is considered to be newer and better than SLIP, although many Internet providers continue to support SLIP dial-up access. SLIP and PPP will be a primary way that retailers with dial terminals that do not have broadband or DSL access will hook up to the Internet for real-time transaction authorization.

SMTP (Simple Mail Transfer Protocol) is used for sending e-mail messages between servers. Most e-mail systems that send mail over the Internet use SMTP to send messages from one server to another. The messages can then be retrieved with an e-mail client using either POP (Post Office Protocol) or IMAP. In addition, SMTP is generally used to send messages from a mail client to a mail server.

POP is used to retrieve e-mail from a mail server. Most e-mail applications, which are sometimes called an e-mail client, use POP.

Advanced Modems

EFT POS terminals will require faster and smarter modems to support transaction authorization and file transmittal over IP. The following are modem types that are either currently in use, beginning to be used in EFT POS terminals, or may be implemented later:

• V.22 provides 1200 bits per second at 600 baud.
• V.22bis is the first true world standard, allowing 2400 bits per second at 600 baud.
• V.32 provides 4800 and 9600 bits per second at 2400 baud.
• V.32bis provides 14,400 bits per second or fallback to 12,000, 9600, 7200, and 4800 bits per second.
• V.32terbo provides 19,200 bits per second or fallback to 12,000, 9600, 7200, and 4800 bits per second; can operate at higher data rates with compression; was not a CCITT/ITU standard.
• V.34 provides 28,800 bits per second or fallback to 24,000 and 19,200 bits per second and backward; compatible with V.32 and V.32bis.
• V.34bis provides up to 33,600 bits per second or fallback to 31,200 or V.34 transfer rates.
• V.35 is the trunk interface between a network access device and a packet network at data rates greater than 19.2 Kbps. V.35 may use the bandwidths of several telephone circuits as a group.
• V.42 provides the same transfer rate as V.32, V.32bis and other standards but with better error correction more reliability.
• V.90 provides up to 56,000 bits per second transmission.

Wireless LAN Standards - 802.11

Use the chart above for quick access to information to help you differentiate between the available IEEE 802.1 wireless networking standards.

Mike English is Ingenico's Director of Marketing and Communications. E-mail him at menglish@ingenico-us.com