Case Study : Providing retailers with complete connectivity
In the second of a series of articles designed to help retailers get the most out of their communications infrastructure, Ray Low, managing director of Transaction Network Services (UK) Limited (TNS), explains how retailers are managing their diverse IT infrastructure for complete connectivity.
In our previous article, we highlighted how the development of broadband technology has prompted many retailers to think about connectivity and converging payment and non-payment data over the same network. For retailers, this is often just part of the story. Acquisitions, organic growth, varying store sizes and locations all contribute to retailers having to cope with a diverse IT estate. The move towards broadband is making many retailers think about how best to deploy this new technology and harness the benefits of high speed IP connectivity. For the IT manager, getting some semblance of order is a real headache � especially when such importance is given to the security, reliability and performance of their network. For the consumer, making a payment by credit or debit card is a straight forward activity: the shop assistant inserts their card into an EPoS device in-store, they take their goods and, weeks later, check their statement to see that the payment has been placed on their account. But for retailers, there�s a lot that happens in between the transaction taking place and receiving money from the acquiring bank including a whole host of connectivity and networking options. This means that retailers are now getting involved in deciding how their payment traffic is carried. Connectivity2Go � a connectivity example Think about the example of a pizza company � the fictitious Pizzas2Go. Pizzas2Go has restaurants across the UK and half a dozen delivery drivers for each site. The IT manager is considering the advantages of deploying broadband technology so the company can send and receive stock and pricing updates and allow restaurant managers to receive company emails. Currently its transactions are dial-up, but with the imminent move to ADSL, there is an opportunity to save money on transaction fees and consolidate payment and non-payment data over the same network. In addition, Pizza2Go�s directors would like to be able to offer customers the option to pay for their home delivered pizzas by credit or debit card at their homes as a service differentiator and reduce the reliance on cash handling for delivery drivers. Fortunately, despite all the options, it doesn�t have to be a headache for the IT manager, as we review some of the main transaction-based connectivity options below: Dial-up and ISDN switched solutions Using switched connections, through dial-up PSTN or ISDN B-Channel, from the point of sale to the host via a private network is still the most common way of handling a transaction. The main perceived drawback to dial-up PSTN is speed. At TNS we address this by offering a PSTN-based solution, via the merchant�s acquiring bank, that utilises a merchant�s existing telephony connection to make significant improvements in transaction times compared to traditional transaction network providers. ISDN is faster and really comes into its own when the D-Channel always-on connection is used. Many petrol forecourts use D-Channel to process large volumes of transactions. Here, for an agreed monthly fixed fee, retailers can use the network for other applications such as security, stock management and vending machines. One customer that is already seeing the benefits of reducing its connection speeds from its previous PSTN application is Morrisons, which uses TNS� ISDN D-Channel solution at its petrol forecourts. Colin McKay, TNS Project Manager says, “Morrisons has seen a dramatic improvement over its previous dial-up authorisation technology and its petrol customers benefit in turn from a quicker and more efficient level of service.” GPRS driving mobility All retailers are looking at ways that they can differentiate themselves from the competition � whether it�s introducing personal shopping, e-commerce, loyalty schemes or by diversifying into new channels. For example, high street fashion retailer Top Shop conducted trials of a personalised home-based shopping service after it found that customers making use of trained style advisors spent 100 per cent more than the average ‘walk-in, walk-out’ customer. How do retailers offering this type of mobile shopping experience handle a transaction and ensure that it reaches the merchant�s host safely? GPRS technology provides a real-time secure wireless medium for the transport of data anywhere, anytime. Deployed with mobile point of sales units not much larger than a cell phone, retail staff are given the flexibility to carry a mobile point of sale device with them to enhance the consumer experience. This type of technology is ideal for retailers like our fictitious Pizzas2Go company. GPRS can also be harnessed in permanent stores as a back up to existing infrastructure as a queue-busting tool or in temporary retail environments, such as exhibitions and events. Minimising footprint GPRS isn�t just about mobility � it enables a point of sale to be placed with the minimum footprint possible. Other technologies, such as Paknet and Mobitex can be utilised at wireless sites to enable the deployment of temporary ATM machines or point of sale devices. These mobile technologies mean that retailers aren�t limited to setting up a point of sale in a shop � think about the benefits of carrying out transactions at exhibitions, festivals, sporting events or in temporary stores. Exploiting the power of IP An additional advantage of employing IP technology is using Voice over IP technology to potentially reduce the cost of communication for retailers. There are many other benefits too. ADSL broadband access between stores and head office ensures immediate communication, helping to improve processes such as inventory management, point of sale performance and timesheet management. Deploying ADSL broadband may also allow retailers to adopt Voice over IP (VoIP), which enables telephone calls between stores and head-office at reduced cost, and data to be transported over the same network. However, there are real gains to be made by exploiting IP to consolidate payment and non-payment traffic over the same communications infrastructure. The challenge for retailers is that most broadband providers treat broadband access like a commodity and are unlikely to have the skills or inclination to deal with the more sensitive payment data requirements. Think about the costs to your business if your payments were delayed, or, worse still, lost. In addition to the security concerns, many broadband providers may not be geared up to supply software upgrades or provide retailers with tools to understand more about their transaction volumes. Recognising that retailers are concerned about reliability and security, TNS� Managed ADSL Service is delivered over a private IP network, not the public Internet, so is more secure, scalable and can be managed and monitored by transaction specialists. X.25 vs IP Regardless of what type of language the retailer uses to handle a transaction, the banking community still deals in X.25 � and that is unlikely to change in the near future. Nevertheless, for retailers considering rolling out ADSL � or even a mix of IP-based technology and X.25 � the transaction needs to end up at the acquiring bank in the right format. To achieve cost savings and systems interoperability, retailers are increasingly employing IP as a major element of their technology stack. The problem they face when attempting to deploy this technology for their card transactions traffic is that the acquirer community, and banks in general, are in no way interested in moving away from legacy X.25 systems. However, TNS handles all message translation from IP to X.25, enabling both banks and retailers to focus on their preferred IT infrastructure. The importance of a private network Aside from speed, the most important factor for any retailer when discussing handling transactions is security. A robust, reliable network is paramount. Even with encryption, many retailers would have concerns about transporting transaction data about their customers over the public Internet. TNS has its own private network that enables data to pass safely from point of sale to the acquiring bank. In fact, chances are, when your card is swiped/inserted at the checkout, the information is already passing over our network. The difference now is that with the proliferation of ADSL and GPRS, retailers are getting involved in deciding how the data is managed and are looking to experts like TNS for advice about how to speed up transactions and reduce their costs. TNS: offering complete connectivity With our complete connectivity suite � from dial-up to ADSL � TNS has the expertise to ensure that both your payment and non-payment data are managed efficiently, flexibly and safely. TNS already has established partnerships with all the UK�s leading acquiring banks. The reason the banks use TNS? Because we�re a specialist. We understand transactions and we know networks inside out. Every day TNS� secure, private network carries millions of transactions, from inserting the card in-store � right through to the acquiring banks for authorisation.
