Hypercom Corp. is moving to turn up the speed of point of sale transactions.
The Phoenix-based company said it has perfected a 9600 baud (bits-per- second) modem, called FastPOS, and will make it available at no extra cost in new terminals beginning in October.
Transmissions would be completed considerably faster than with the current 1200- or 2400-speed modems. Hypercom said that at 3.6 seconds, a FastPOS connection can perform a typical card transaction in about half the time it now takes. A merchant's settlement of 15 transactions could be uploaded in 6.7 seconds, down from 26 seconds at 1200 baud.
"This industry has not changed modem speeds in over 10 years," said Hypercom chairman and chief technologist George Wallner.
The information load began to grow several years ago with the Visa Payment Service 2000 program-which gathered a broader set of merchant and payment data for analysis-and has increased with the advent of commercial and purchasing cards, loyalty-point systems, and smart cards.
Although stored-value smart card transactions are completed locally on the card, they are bundled on the merchant's terminal for an end-of-day transmission to its bank. Mr. Wallner said the time and cost of such uploads contributed to the negative responses from merchants in the current Mondex-Visa Cash test on New York's Upper West Side.
"Things would have been very different" with 9600 bit speeds, said Mr. Wallner, who argued against the New York pilot planners' decision to keep chip card operations separate from debit and credit terminals.
Mr. Wallner suggested that the shorter downloading and batch-loading times could bring benefits beyond the per-transaction speeds. "FastPOS will be able to efficiently support new applications that contain more and more data," including loyalty, medical payments, and insurance claims, he said.
FastPOS could alter the large-retailer trend toward "host settlement," which relies on a central computer to obviate the need for extensive batch transmissions at the ends of business days, Mr. Wallner said. FastPOS would make it easier to accommodate touch screens and other more sophisticated graphics, he added.
The innovation sprang from Hypercom's network technology business, which Mr. Wallner said was challenged by the need to minimize the time for the modem to be synchronized, or trained. Higher-speed personal computer modems, now going as high as 56 kilobits per second, synchronize in eight to 15 seconds. Hypercom sought to keep the entire POS transaction length under eight seconds "without a cost or time penalty," Mr. Wallner said.
Transaction Network Services Inc. of Reston, Va., will be the first to support FastPOS. President John J. McDonnell said it benefits an industry "always looking for ways to decrease costs and improve performance."
Robin Abrams, president of Hypercom's larger POS rival, Verifone Inc., said she agrees that speed is crucial but that she does not view Hypercom's announcement as a particular breakthrough. She said major retailers rigorously "benchmark" throughput speeds-"and we come out great, I might add."
Mr. Wallner said Hypercom will liberally license the technology because "we will be better off as an industry. If a higher-speed modem is not a pressing requirement today, it will be soon."
