Sign & Go Terminals

RETOOLING PAYMENT DEVICES FOR NEW FUNCTIONALITIES

As retailers re-invent their in-store purchase processes, payment terminals are emerging as a key enabler. The payment terminal is at the center of many new initiatives because it promises fast ROI and high payback.

Also, it offers the possibility of shifting purchases to lower-cost debit or Automated Clearing House (ACH) transactions. And the benefits don’t stop there. New systems are aimed at cutting chargeback losses, reducing fraud, slashing manpower that goes into till counting, boosting store-brand imaging, increasing time and attendance accuracy, offering wireless checkout and paperless store operations.

Another factor driving changes in payment terminal technology is the need for higher-level security, such as Visa’s Triple-DES encryption requirements or Health Insurance Portability and Accountability Act (HIPAA) regulations at pharmacies.

"The big trend today is device integration," says Scott Allan, vice president and general manager of the payment unit for Symbol Technologies.

"Looking at payment holistically is key. There is a need to retool POS for a nicer customer display, PIN debit, lower TCO, elimination of paper in stores and compliance with HIPAA. Payment at POS is being transformed into something like a customer-facing kiosk."

Among the devices being integrated, according to Allan, are the pole display, credit-card swipe, PIN pad and, most importantly, the signaturecapture device.

Many merchants are using signature-capture systems for other processes, too. The system at Federated Department Stores delivers further savings by recording when associates sign in (a handy time-and-attendance function) in a secure way that eliminates buddy punching. Some retailers, according to Howard B. Cantor, vice president of retail for Hand Held Products, use signature capture units to sign agreements on truncated checks.

HOW SAVINGS ADD UP
It often took six weeks to resolve a charge-back claim at an average cost of $10 each, report executives from Federated Department Stores. After implementing Symbol signature-capture devices, the time and cost to handle disputed charges were slashed to the point where payback was achieved in less than two years and millions of dollars were saved.

Even for retailers who don’t handle chargeback resolution, in-house savings can still be achieved by transmitting signature-capture files to third-party processors, who then handle retrieval and final resolution.

According to John Jones, senior business analyst at Ingenico, signature capture at POS cuts transaction cycle times by five to 15 percent, so labor savings add up, especially at multi-lane stores.

Credit and signature debit transactions are much more expensive to retailers than PIN debit or ACH transactions. So retailers are prompting consumers to use debit cards via payment terminals and fingerprint readers. (See "Biometrics Cut Costs" at left.) Some retailers have shifted 70 percent to 80 percent of debit-capable credit-card transactions to PIN debit this way, although results vary widely.

The jury is still out on the value of using signature-capture and payment terminal screens as advertising media. CVS is using screens to show missing children as a public service. Some retailers have used them successfully for promoting customers to sign up for private-label credit cards.

MORE CHANGES ON THE HORIZON
More big changes are coming. The most revolutionary technologies center on RFID and biometrics, but they are far from mainstream deployment yet. "Most of the RFPs we respond to now list smart-card capabilities and color screens as requirements," says Lynn Kerchner, product manager payment for NCR.

According to Symbol’s Allan, mobile payment terminals with signature-capture capabilities are being developed for drive-through and line-busting operations. Ability to take payment via cell phone is another experiment.

Some retailers are insisting on flexible Webenabled payment processing devices capable of handling or receiving modular attachments for credit, debit, signature capture, smart cards, RFID readers, 3DES encryption, electronic receipt capture, on-screen advertising, CRM/loyalty program links, customer surveys and wireless. Verifone is one vendor that can handle many of these functionalities.