Firm Takes On Challenge of Check, Credit Card Purchases in the Field
Written by Evan SchumanWith more home deliveries and installations, retailers and restaurants are facing the point-of-sale challenge of verifying payments away from the POS while paying higher credit card fees for card-not-present purchases.
Commerciant, a Houston-based wireless paying processing house, is coming to the aid of those merchants with the introduction of a combination unit that wirelessly authenticates and processes both check and credit card payments.
The firm is positioning the unit?dubbed the Mobilescape 5000?as one of the first remote units that can process both payment forms. How well the $900 device works is unknown, but analysts say that the need for such a device is real.
“This is a huge deal,” said IHL Consulting Group President Greg Buzek. “This allows mobile professionals and delivery personnel to verify funds while at the consumer’s premises. If something is wrong, they can get another form of payment right there rather than having to track down the people again. This is a huge money saver for the companies that do these kinds of services.”
Buzek believes the check-writing portion is new. “There have been some that were pushing an idea of cellular modems and such. Today, most all call in the numbers to a home office, thus taking up some other person. I don’t know of any big rollouts, but I know Domino’s has been looking at this for a couple of years.”
The check verification portion does not check the customer’s bank account, but merely looks for the customer’s name on a list of known check bouncers. If the customer’s name is not on that list, it assumes the check is valid.
“The check [packages] for retail are really only suitable for in-store,” said Commerciant CEO Timothy Davis, because the units are too heavy and require too much power for them to be used off-site.
Davis said his company got around the weight and power issue by eliminating the motor and allowing the check to be pulled through by hand. The trick was to have the check’s scan heads be able to accurately read the check with the imprecise jerks and stops that hand-pulling typically delivers.
The new unit “uses a patented system for variable velocity scanning, which reliably converts the check information to an electronic payment,” Davis said.
Many merchants handle the credit card authorization by simply having the customer phone in the credit card number so that it can be verified before the delivery is made, but that exposes the merchant to the more expensive card-not-present interchange fee. By pulling the card through directly in the field?with a real-time wireless connection?the merchant is charged the lower card-present rate.
Davis claims that another differentiation with his system is the Mobilescape 5000’s ability to store those signatures at the company’s server, which allows for later online retrieval by the merchant, for dispute resolution. Commerciant today allows such access for three years, but the company may significantly reduce that soon, Davis said.
“There has been some discussion of what extent we might shorten that for storage reasons” to “maybe something like nine months.”
Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code.
-Marc
