September 03, 2009
IP Pay's Wu: Credit Card Services Are Ripe for CompetitionBy Paula Bernier, Executive Editor, IP Communications Magazines Eighty-five percent of the small business market is still using analog technology for point of sale applications, and this presents a significant opportunity for competitive service providers, said Charles Wu, head of IP Pay, a division of Convergence (News - Alert) Technologies Inc., which wholesales credit card services.
Competitive providers could come in and offer those customers the services and connectivity to help them migrate credit card applications onto IP-based connections, and they could offer other voice and data services as part of the deal, Wu said.
“People are doing it,” Wu said. “The technology is there. It’s more of a mindset change, and it’s more of a fundamental business process change” that will be required for this movement to go mainstream.
“To a small business, they love to save $30 on their voice. But if they can’t process payments, they’re out of business,” Wu said. “So you’ll still find gas stations and convenience stores that have dedicated phone lines for each credit card machine.” And a supermarket with five registers may have five phone lines, he says.
Some companies address these customers by running ATAs and emulating a dial line, he said. But he says that’s a problem because then the credit card information is then traversing the connection unencrypted. It’s also less than ideal because dial-up transactions for this application typically take 10 to 15 seconds whereas similar IP-based transactions average just two to three seconds, which is a significant difference for both businesses and their customers.
“If you look at the world of payment it reminds us of the world of Internet where Internet was mostly dial-based and broadband was just coming along,” Wu said.
IP Pay sells the IP Pay Account Updater, which ensures uninterrupted recurring payments by seamlessly updating “card on file” account information without impacting cardholders. Cardholder account information changes occur for a variety of reasons, including card upgrades, bank portfolio conversions, card expirations, lost or stolen cards and account closures. IP Pay Account Updater extends the life of recurring payment arrangements by helping secure ongoing, revenue-generating relationships, all while locking in revenue, reducing processing costs, maintaining service continuity and strengthening cardholder satisfaction. Follow ITEXPO (News - Alert) on Twitter: twitter.com/itexpo Edited by Michael Dinan |