wireless LAN (WLAN) is a local area network without wires. WLANs have been around for more than a decade, but are just beginning to gain momentum as a result of falling costs and improved standards. WLANs transfer data through the air using radio frequencies instead of cables.

Some wireless LANs can send data over a radius of 500 feet indoors and 1,000 feet outdoors-with antennas, transmitters and other access devices extending the area served. Key electronic payment WLAN attributes

There are several factors merchant sales reps should be aware of when selling a short-range wireless payment terminal LAN. Those are:

• Square footage of average restaurants is 6,000 feet with dining areas of 4,000 square feet requiring the terminal to operate with an average radius of 75 feet
• The payment terminal must be lightweight, durable, operate six to eight hours and hold 100 to 200 transactions per terminal before batching out
• The LAN must provide a primary terminal that holds a single batch with backups available on each secondary terminal
• The LAN should provide a single hi-order communications using with traditional dial, IP over dial or broadband with dial backup

There are two types of wireless technology that offer a solution for retailers, restaurants and businesses that need customer-convenient payment: WiFi (802.11b) and Bluetooth.

A new standard created by the Institute of Electrical and Electronics Engineers (IEEE) called 802.11b or WiFi transfers data at speeds of up to 11Mbps (million bits per second) in the 2.4 gigahertz radio band where a license is not required for this band.

Bluetooth is the name given to a wireless technology using short-range radio links to replace the cable(s) connecting portable and/or fixed electronic devices. Its key features are robustness, low complexity, low power and low cost. Bluetooth also operates at 2.4 gigahertz radio band with transfer speeds of about 720kbps (kilo bits per second).

What are the differences between WiFi and Bluetooth?

In relation to the needs of a retailer, restaurant or business accepting electronic payment, there are four areas that are critical to successful wireless payment acceptance: coverage distance, transmission reliability, security and power consumption. Transmission speed is not a significant factor in selecting either WiFi or Bluetooth since the average authorization message is only 200 bytes and the average application for downloading is 250K bytes.

Even though there is a substantial difference in transfer speeds between WiFi and Bluetooth, the small data transfer amounts will not account for any significant difference in transaction authorization speed.

Coverage Distance

Bluetooth is specified to operate at about 30 meters, which is a little over 110 feet. WiFi operates at about 300 feet. Being that the average restaurant requiring multiple payment points is 5,000 square feet and that multiple terminals will be implemented, selecting Bluetooth will not impair wireless coverage. Engineers have successfully tested Bluetooth for up to one-quarter mile in distance.

Transmission reliability

Designed to operate in noisy frequency environments, Bluetooth uses fast message acknowledgement and a frequency-hopping scheme in order to ensure that wireless transmission is robust and successful.

Bluetooth radio modules operate in the unlicensed ISM band at 2.4GHz and avoid interference from other signals by hopping to a new frequency after transmitting or receiving a packet.

Compared with WiFi, which continually operates in the same frequency band, Bluetooth is more efficient in data packet transfer. Use of WiFi in establishments where people use PDAs, cellular phones and other wireless devices and where other area WiFi networks are located nearby may experience transaction authorization difficulty.

As the popularity of WiFi grows and if too many people or businesses in the same area have WiFi WLANs, then the band of air in which they transmit signals can become overcrowded. Problems with signal interference are already occurring and there are fears that the airwaves will become overloaded.

Security

A small research group from the University of California at Berkeley recently released a report stating that they found flaws in WiFi (802.11b). In the report, the researchers said that they were able to intercept transmissions over the wireless network.

These transmissions were encrypted, but the encryption was broken. Through its frequency-hopping and use of SSL (Secure Sockets Layer provides authentication and confidentiality to applications), Bluetooth technology makes it more difficult to intercept wireless transaction transmission. Bluetooth is a highly-secure radio technology, well suited to transmit confidential data. Each Bluetooth address is unique-changing 'channels' 1600 times a second makes eavesdropping difficult.

The user can request authentication through a remote device (exchange of secured link keys) using PIN verification of up to 16 bytes. All transmitted data are encrypted with security increased at the application level. Bluetooth also offers two levels of (optional) password protection. WiFi has all the security risks associated with other networks, once someone has access to one part, he or she can access the rest.

Power Consumption

Bluetooth has a smaller power requirement than WiFi and Bluetooth communication modules are physically smaller, making Bluetooth a good choice for consumer electronics devices. With a requirement to operate a terminal for six to eight hours, terminal power consumption used during transmission and printing may become a major factor.

Ease of Installation

Using Bluetooth, a single terminal can be connected to up to seven other terminals at the same time. WiFi is more complex-requiring the same degree of network management as any comparable wired network.

This may extend the time required for a merchant sales rep to install the WLAN payment system-reducing customer satisfaction and merchant sales rep profitability.

Summary

Wireless technology removes the impedance to successfully selling and implementing LAN-based payment systems by eliminating the need for wiring. Of the two major choices available to terminal providers today, Bluetooth offers the most attractive solution for short-range wireless payment terminals, providing advantages in coverage distance, transmission reliability, security and power consumption.

Michael English is the Director of Marketing and Communications for Ingenico, the global leader in payment terminals, operating in over 80 countries. Ingenico is also a leader in wireless payment technology, shipping over 200,000 wireless terminals in 2002. For more information about Ingenico and our wireless payment products, visit our North American Web site at www.ingenico-us.com