he increasing number of options in the wireless transmission of payments may seem a little overwhelming at times. The telecom industry is prone to talk in acronyms and the media tend to flit from one technology to the next, which can leave everyone else in a state of confusion.

ISOs/MLSs fall somewhere between industry insiders and consumers, and it's imperative they understand the jargon and can sift through the hype. Despite the buzz, the primary issue around wireless is all about selecting the right solution for optimal merchant satisfaction and profit.

The first issue is to understand the benefits of the technology. This means that as a sales professional, you'll need to be up to speed so that you can select your target markets, select the appropriate solutions and educate your merchant customers.

Using wireless data networks for electronic payments provides very tangible merchant benefits:

• Proven, reliable, secure communications technology
• Merchant flexibility
• Faster transaction times
• Lower terminal installation and operational costs

Wireless networks lower the cost of installing electronic POS terminals since merchants avoid the expense and inconvenience of installing additional telephone lines at payment locations. Wireless also eliminates the down time spent waiting for extra lines to be installed.

Smaller merchants with only one business line can dedicate that line to business calls; the line won't be tied up to process electronic payments anymore. Mobile businesses, such as retail delivery of groceries, will be able to accept payments on the fly, reducing their risk of fraud and theft while providing their customers with increased convenience.

When it comes to wireless, ISOs/MLSs should be familiar with the differences between wireless local area networks (WLANs), also commonly referred to as WiFi, and wireless wide area networks (WANs). To draw a parallel to the wired world, WLANs are the wireless equivalent of your Ethernet office network, while WANs are equivalent to your phone network.

There's been a lot written about WiFi in recent issues of The Green Sheet, so we won't belabor that point here. The key element to consider with WiFi is its application in relatively small areas, say within 300 feet from a base station or wireless access device.

That makes it very suitable for portable applications, such as restaurant handheld POS systems, "lane buster" check-out in stores and malls, extending an existing wired Internet Protocol (IP) network to temporary outdoor locations, or simply eliminating the need to run Ethernet cabling within the location.

Amid all the attention that's been devoted to WiFi, wireless WAN options have been somewhat overlooked. That's unfortunate, because the infrastructure for wide scale deployment of wide area networking transmission such as Code Division Multiple Access (CDMA) has been proceeding aggressively.

Without a doubt, the largest benefit offered by wireless payment terminals is the ability to tap into broadband transmission, using IP, without having to install Ethernet wiring, routers and hubs. This allows merchants to benefit from faster transaction speeds, greater security and reduced costs.

But not every merchant location has access to or wants to install a wired broadband infrastructure, of which WiFi is a wireless extension. WAN technologies including CDMA and General Packet Radio Services (GPRS) allow merchants with mobile or transportable payment terminals to figuratively "cut the cord."

They no longer need to run telephone connections to every location or lane where electronic payments are accepted and processed. It's very similar to switching from landline to mobile phones for voice calls.

Portable payment terminals enable merchants to instantly add a lane during peak sales periods or extend electronic payment capabilities to sidewalk sales, garden centers or other outdoor venues. The terminals are also well suited for restaurants and resorts that need to follow guests to patio dining areas, golf courses, tennis courts or remote beaches.

Merchants on the move including kiosk vendors located in high traffic areas of malls, airports and trade shows, or at events such as flea markets, craft fairs, festivals or sports competitions, often have no access to a wireline telephone connection.

Battery operated, wireless portable terminals allow these merchants to accept a variety of debit and credit payments which encourages larger purchases and provides online authorization for improved security.

Other types of businesses that might be attracted to portable payment terminals include mobile service providers such as moving, cleaning and delivery; limousines and taxis; home "parties;" insurance sales and temporary businesses that operate in locations where phone service and/or power may not be readily accessible.

However, wireless isn't just about portability anymore. An increasing number of merchants use wireless WAN connections in everyday settings where dial-up terminals work just fine. Why? It's very simple: improved technology that's less expensive.

The cost of wireless communications has dropped dramatically in the past several years to the point where some individuals have cast off their landlines in favor of wireless-only voice services that bundle long distance, local, voicemail and three-way calling. Wireless WANs that connect a POS terminal to an acquirer share the same basic economic justification that drives consumer migration: lower cost and better service.

Major carriers do not bill out their data network services in minutes used, but rather on the amount of data transmitted on a monthly basis. A typical POS terminal transmits such a small amount of data that the wireless carriers have set up special pricing plans that reflect this usage model, which in some cases can be 50 to 70% lower than the cost of the average business phone line.

Wireless WAN services are typically "always on," so in addition to being substantially cheaper, they also perform better. This frees up the merchant to focus on sales and customers instead of staring at the POS screen waiting to see the word "approved."

There are two main options available for wireless WAN: CDMA, which has been the cellular standard most popular in the United States, and GPRS, an enhancement to Global System for Mobile Communications (GSM), that is widely deployed overseas and has been catching on recently in this country.

If you carry a Verizon Wireless mobile phone, it probably has a "1x" symbol on the screen. This is shorthand for 1xRTT, an acronym for single carrier (1x) radio transmission technology, which is CDMA2000 and is the first phase in CDMA's evolution to third-generation (3G) technology. 1xRTT transmits at speeds of up to 144 Kbps (kilobytes per second) and some say it provides greater network capacity than earlier digital techniques. This allows more users and results in fewer dropped calls. Sprint is another carrier using CDMA.

GPRS has a theoretical maximum transmission rate of up to 171.2 Kbps, but in practical applications is more likely to operate at 20 or 30 Kbps. GPRS generally has the backing of telecom service providers from the Time Division Multiple Access (TDMA) and GSM world, including AT&T Wireless, Cingular and T-Mobile.

With the tremendous growth in wireless data services aimed squarely at consumers (admit it, you have sent or received a picture on your phone), the POS world stands to benefit from the wider availability and lower costs being driven by the huge investment in these networks.

All of this may sound a bit technical or confusing, but what it really comes down to is this: In this increasingly competitive environment, IP- and wireless-based solutions represent one of the biggest upgrade opportunities for our marketplace in recent memory. Those that take the time to understand how to sell the benefits and partner with companies that can deliver them will certainly grow their market share.

Paul Rasori is VeriFone's Vice President for North America Marketing and plays a key role in helping VeriFone customers integrate current payment and communication technologies. He can be reached at Paul_Rasori@verifone.com .