uppose your merchant wants to go national, using one broadband provider for its locations from California to Maine. Instead of each site negotiating its own service contract, a networking company can coordinate the project. However, picking a service provider from among dozens can be daunting.

But for retailers who've chosen New Edge Networks, hindsight makes it seem the only viable option: The coast-to-coast communications pro focuses on payment-processing networks for merchants.

Take Metromedia Restaurant Group's experience, for example. In 2005, MRG went shopping for a network integrator to link its 315 Bennigan's, Steak and Ale, and Ponderosa Steakhouse restaurants via a broadband virtual private network (VPN). The group evaluated 20 to 25 telecom integrators, including "the big players: Qwest, MCI, AT&T," said Steve Ellis, MRG's Senior Manager of Information Technology.

MRG opted for a wired installation, eliminating satellite providers in the process. "We liked New Edge because they had their own backbone," Ellis said, referring to New Edge's major private network for carrying communications traffic. "They weren't reselling [for a bigger telecom carrier], and they had their own operations center to manage and monitor" the system.

And, New Edge had agreements in place for the notoriously difficult last-mile connections (the technology connecting customer sites directly to cable or telephone companies). The integrator coordinated last-mile links to all of MRG's restaurants through the respective "Baby Bells," placing 300 local orders for high-speed data lines and successfully coordinating installation, "all using people outside their control," Ellis said.

Such coordinating headaches are the province of New Edge. "I'm a 300-site customer," he added. But MRG didn't experience any installation glitches, in spite of the fact that local telcos can be slow to work with. New Edge's management of last-mile connections after installation was another plus: Ellis said he needs that ongoing service.

The chain immediately moved its gift-card processing, polling and e-mail to the network. It reserved credit card processing for a later hardware investment.

The invisible hand

New Edge is an underlying network provider to most other major telecom carriers, including AT&T, Verizon Communications and BellSouth Corp., according to Sal Cinquegrani, Executive Director, Corporate Communications for New Edge.

No other networking company has its breadth and scale, according to Kevin Gallagher, Senior Vice President of Corporate Alliances for Chase Paymentech Solutions LLC, a New Edge partner. "We do a lot of due diligence," Gallagher said. "We have found New Edge to be a phenomenal partner on the security and compliance side. They're in a league of their own."

Founded in 1999 with venture capital funding, New Edge is a single-source provider for broadband networks at virtually any business address in the United States. EarthLink Inc. acquired it in April 2006, giving New Edge deeper pockets.

"We have the largest DSL footprint among all carriers," Cinquegrani said. "If a customer comes to New Edge, we can design, build and manage a network with locations that are coast-to-coast, border-to-border."

New Edge competitors provide DSL connectivity in the biggest cities, but that leaves much of the country beyond the reach of any single big telecom name. Outside urban areas, major telecoms tend to buy network access from New Edge, Cinquegrani said.

New Edge is generally wire-line-focused, using a blend of access technologies to get a customer fully connected. With the biggest DSL coverage area, the company reaches about 90% of U.S. business addresses. In locations where DSL is unavailable, New Edge works with frame relay, cable and satellite. It plans to supply a wireless solution in coming months.

New Edge also offers one of the newest technologies: multiprotocol label switching (MPLS), which enables businesses to merge all of their voice, video and data applications onto a single network.

MPLS lets merchants prioritize network traffic and control quality of service, while combining POS applications, Voice over Internet protocol (VoIP), digital video monitoring, inventory management and e-mail on the network, instead of paying for additional phone lines.

Payment specialists

In 2005, New Edge took two key steps: obtaining Payment Card Industry (PCI) Data Security Standard compliance and focusing on the merchant market. In August 2006, Visa U.S.A. revalidated New Edge's PCI status.

The company also established the Retail Broadband Alliance, a forum of companies working together to migrate merchants to private, wide-area broadband networks. Members include ISOs, major payment processors, POS equipment and software vendors, back-office support systems, security-monitoring services, value-added resellers, integrators, and consultants.

ISOs can earn commissions and bolster their relationships with existing merchants by referring them to the RBA, Cinquegrani said. Members refer their customers to the alliance, and exclusivity is not required.

In 2005, New Edge launched America's Retail Network information exchange, or ARNie. "ARNie is like a national extranet on steroids," Cinquegrani said. It provides on-net, private, direct connections to payment processors; back-office online solution providers; payroll services; information-technology help desks; security-monitoring services; and ATM networks.

"We allow our customers to use direct connections at no extra cost," he added, estimating the savings to businesses range from $250 on up per month.

New Edge has direct connections to payment processors representing about 70% of all U.S. card transactions, he said. Connections link to Chase Paymentech, First Data Corp., American Express Co., TSYS Acquiring Solutions LLC, National Bankcard Services Inc., Fifth Third Bank and RBS Lynk Inc.

The weakest link

Direct connections also help multisite merchants eliminate a weak spot in transaction processing. When multisite merchants funnel all transactions through their headquarters, if the circuit to the processor goes down, all payment processing stops. With New Edge, payments run from individual stores to the processor over direct connections with built-in redundancy to ensure ongoing service.

This tailoring for the retail market gives the company its "edge." The Sbarro restaurant chain uses New Edge's direct connections to First Data's CES (formerly Card Establishment Services), enabling traffic to go straight from the stores to CES.

Mike Manley, POS Manager for Sbarro said this "allows us the fault-avoidance of the corporate network. Credit cards can still process from the store to CES." It got rid of a processing bottleneck at corporate headquarters, he explained.

"Transactions are almost instant - less than two seconds," at the 392 corporation-owned stores currently using New Edge's network, Manley estimated.

For Sbarro, the real advantage of the New Edge-managed network is the restaurant's ability to glean polling data, including hourly sales information, from the stores.

Using New Edge's direct connections to a processor "makes it much easier to get a merchant up and running," said Chase Paymentech's Gallagher. The connections are completely secure from a PCI security standpoint, he added.Prior to Chase Paymentech's direct connections, getting a multilocation merchant installed through a traditional telco usually took 90 days, Gallagher estimated. Now, when New Edge installs a store's broadband connection, which takes just days, the connection to Chase Paymentech immediately goes live.

Up next: Secured IP

"The hype has been [conversion from] dial to IP," Gallagher said. "What is coming next, honestly, is secured IP," which is having a network monitored and managed by companies like New Edge to provide a stable and secure system. Without such monitoring, neither merchant nor processor has complete control over transactions, Gallagher said.

The minimum number of locations to justify a New Edge connection is three to 10 store locations per merchant, he added. For MLSs, the sales strategy shifts the dialogue with merchants. "Instead of focusing on payment processing, the ISO can also sell a broadband network on the complete value it provides the small merchant over a high-speed connection," Gallagher said.

This includes faster transaction processing and checkout time, more customers coming through the line, and bundled connectivity for all of the merchant's Internet communications, even VoIP.

Changing the dialogue

"We're helping ISOs change the dialogue with the merchant from interchange rates or processing fees to offering the merchant more value-added services," Cinquegrani said. With merchants using dialup, MLSs can talk about the advantages of broadband, eliminating service fees for a separate connection to the payment processor.

"Some [ISOs] have figured out that by bundling services, they could retain more customers, more hooks,"Cinquegrani said. ISOs can resell New Edge services. MLSs can earn up to 14% monthly commissions.

"That's a nice recurring revenue stream," Cinquegrani said. "Virtually all of our direct sales are through a partner. We act as an adviser to the ISO," helping to sort out network parameters for individual merchants.

"Every business needs a network," Cinquegrani added. "Broadband networks represent one of the biggest growth areas in telecommunications. ... ISOs/MLSs who jump in early will take advantage of first-to-market opportunities."