raditional solutions for setting up retail merchant accounts typically have incorporated dial-up bankcard terminals or, possibly, software programs that enable PCs to act like dial-up machines.

With the advent of Internet protocol (IP) terminals, retail merchants can go beyond tried-and-true, basic functionality. Since IP terminals use IP (Ethernet or Wi-Fi) connections to authorize credit cards, they can connect to any Web site just like a computer with an IP connection does. This means that IP terminals can connect not just to processors, but they can also connect to payment gateways.

The connection

Most, if not all, payment gateways in our industry have an application protocol interface (API). POS software and e-commerce toolkits, like shopping carts, connect to gateways through APIs, and IP is their connection method. As ISOs and merchant level salespeople (MLSs), you can show customers how to use the exact same APIs to enable IP-terminals to connect to gateways too.

The advantages

Now that you understand how IP terminals can connect to payment gateways, you might wonder why merchants would want to do that instead of connect to processors. There are actually numerous advantages.

Among the biggest are the online reports and stats provided by gateways that traditional terminals can't supply. A payment gateway can store a credit card transaction record for the life of a merchant's account, whereas a basic machine usually deletes the record once the batch is closed. Using gateway online reports, merchants can login anytime and download, search and view processing history.

Another advantage is that if a merchant has multiple terminals, a gateway allows all of them to connect to one gateway account, and the merchant can then view all activity and reports through that account. To connect multiple terminals to a processor, a merchant would need to set up multiple merchant accounts or multiple terminal IDs.

Availability

IP technology and terminals are readily available now for merchants of all types. Key players such as VeriFone, Hypercom and ExaDigm all have IP terminals that connect to payment gateways using Ethernet and Wi-Fi connections. Merchants interested in a particular gateway can find out which devices that gateway has certified.

What about cost?

A lot of you may think that this technology is likely to cost an arm and a leg, but in reality the cost of an IP terminal versus a basic dial-up terminal (keeping in mind that IP terminals are a terminal and printer in one) are quite comparable. With that, there is no reason to not try selling customers on these new, more advanced terminals.

Ben Goretsky is the Chief Executive Officer and head of IT Development at USA ePay. He has been working with his brother Alex since they started the company in 1998. E-mail him at ben@usaepay.com or call him at 866 872 3729, ext. 350.