American Payment Exchange

Point-Of-Sale Convergence Technology Report...

By: Jim Paullus

Introduction - Today's advanced technology offers transaction processing systems able to consolidate multiple transaction processing functions, POS product offerings and financial services into one package accessed by a single user friendly terminal at the merchant’s sales counters. A few short years ago, such software operating platforms either did not exist or were to costly and out of reach for most merchants. That has all changed and the playing field has been equalized with new technology that is affordable to any merchant wanting to improve business performance.

Service Provider Trends - Most service providers trend to specialize and may offer only a few services or products they are focused on supporting. Examples; a long distance card provider may only offer long distance, a prepaid bankcard provider only offers bankcards and a check or credit card processor may only offer check or credit card processing.

Multiple products, services and multiple provider access at the point-of-sale have presented problems to merchants for several years. In the past, merchants wanting to access multiple services and providers were required to have multiple stand-alone processing terminals crowded onto valuable point-of-sale counter space. Many not so well informed merchants continue to operate in such an inefficient processing environment with 3, 4 or even 5 stand alone terminals on the counter for access to multiple providers.

Such merchants either simply fail to comprehend and understand the many benefits of a more streamlined approach to accessing multiple providers or they are not aware that point-of-sale convergence technology exist.

Understanding The POS Convergence System - A simple stand-alone Verifone Omni 3750 or 3740 terminal with its own built in receipt printer is able to access multiple software applications that can be loaded to reside in the terminal. The multiple software applications, once loaded, provide the instructions required to provide multiple transaction processing functions and access instructions to financial services and products.

The multiple software downloads can be used for terminal processing functions such as merchant credit /debit card processing, check processing, prepaid card products age verification, etc.

The other part of the technology puzzle that makes point-of-sale convergence able to operate from a stand alone terminal is connection and access to a remote system-operating platform. One of the important functions of the remote system-operating platform is to rout and connect the merchant’s point-of-sale processing terminal with multiple service providers. Another very important function of the remote system-operating platform is to provide detail reporting for use by both merchants and providers.

Packaging Requirements - Even with point-of-sale convergence technology advancement, a multitude of merchant processing services, financial services, point-of-sale products and providers exist in today’s market place. All of these providers, services and products must be evaluated, screened, selected, contracted, certified to work within the POS convergence environment and set up on the point-of-sale convergence operating system.

Once a “Full Service” provider has completed this process, the Full Service provider must then package all of the services into a merchant offering that:

Is very simple and user friendly
Has very low front end cost
Has low long term operating cost
Offers a major cost reduction vs. cost of current systems in place
Improves risk/loss management
Provides added profit center
Increases customer return traffic

Among the vast majority of point-of-sale transaction processors and service providers an extremely limited few have become Full Service providers. Most providers are simply content with their own success level obtained from a limited service offering or they lack the Full Service provider vision required to advance.

About American Payment Exchange:

Mission & Goals - The mission of American Payment Exchange is to provide multiple transaction functions along with multiple financial products and services with a simple, user friendly, convergence access system at the merchant’s point-of-sale counter. Key goals for American Payment Exchange are to reduce merchant operating cost, improve merchant risk/reward management results, provide merchants with added profits and return customer traffic.

American Payment Exchange has devoted considerable time and effort towards becoming a Full Service provider. Efforts are on going to seek out and secure business alliances that will advance, enhance and promote the continued advancement of Point-Of-Sale Convergence Technology.

Current Processing & Services Offering - Some of the transaction processing functions and financial services now available for POS convergence are:

1. Merchant Reseller Program For Prepaid Card Services, Including MasterCard, long distance phone cards, wireless phone cards, wireless phone custom ring tone cards, wireless phone game cards, Internet connect cards, home phone dial tone reconnect cards, roadside assistance cards and pharmacy discount cards. The prepaid card package provides an added merchant profit center and appeals to the millions of un-banked and/or cash customers.

2. Credit / Debit Card Processing, with very competitive Visa / MasterCard rate plans including, “Pass Though Pricing” and special "Small Ticket" pricing plans. These are straightforward pricing plans designed for merchants wanting streamlined, bottom line cost controls on Visa/MasterCard processing cost.

3. Electronic Age Verification, for tobacco, beer, wine, liquor, firearm sales and other age sensitive products or services. Used at the sales counter to provide assurance of legal compliance with age restricted product and/or services sales. Electronic age verification is designed to prevent merchant acceptance of, “Fake ID’s” and many forms of, “Altered ID’s.” With Electronic age verification, merchants can prevent costly fines imposed by local and state law enforcement authorities that monitor the sale of age sensitive products or services.

4. Consumer Check Verification, with database access to over 85% of all DDA (Direct Deposit Accounts) plus access to one of the leading check processing historical databases and risk management systems. This system is the back room processing system for many of the nations leading banks; major merchant accounts and franchise check cashing services.

Check verification provides a low cost front line of, “Bad Check,” defense for merchants by screening for possible Problem Check Accounts, known Check Fraud Offenders and Closed Accounts before the merchant agrees to accept the check. In addition to the front line of defense that prevents most bad checks, a free back up service called, Electronic Check Re-Presentment, is available to collect funds on Bad Checks that may manage to filter past the verification process. Consolidated Returns service may also be added to eliminate the return check fees charged by the merchant’s bank. The overall result is reduced Bad Check cost and reduced risk of loss for merchants.

5. Payroll Check Cashing Verification, provides all the same type of verification and risk management services as Consumer Verification except the Payroll Check Cashing Verification system accesses one of the largest business bank account database systems nationwide.

Payroll Check Cashing Verification provides the same front line of, “Bad Check,” defense for by screening for possible Problem Check Accounts, known Check Fraud Offenders and Closed Accounts before the check cashing service agrees to accept the check. In addition to the front line of defense that prevents most bad checks, Electronic Check Re-Presentment, is available to collect funds on Bad Checks that may manage to filter past the verification process. Consolidated Returns service may also be added to eliminate the return check fees charged by the merchant’s bank. The overall result is reduced Bad Check cost and reduced risk of loss for merchants.

5. Visa POS Electronic Check Conversion, with either verification or guarantee services provides a stronger front line of, “Bad Check,” defense for merchants than check verification only. This system uses the Visa debit system for real time automated customer account funds verification and is able to place a real time automated hold on account funds when the check is accepted at the point-of-sale and verified though the Visa debit system.

Funds are direct deposited to the merchant’s account within 24 hours instead of the usual 48 – 72 hours offered by other Electronic Check Conversion processors. In addition to the stronger front line defense, the system uses the leading check processing historical databases and risk management systems for added risk reduction, plus Electronic Check Re-Presentment is also available for added merchant check loss reduction when merchants elect not to use the check guarantee services. Due to the excellent results and lower cost of conversion with verification vs. guarantee services, most merchants elect not to use the guarantee services.

Visa POS Electronic Check Conversion streamlines customer check handling at the point-of-sale counter and eliminates merchant back room check handling. Also, merchant check losses are reduced to a level lower than merchant credit card losses in most comparisons. Visa POS Electronic Check Conversion processing cost are also far less than merchant credit / debit card processing cost. Merchants currently accepting, handling and depositing paper checks using traditional methods benefit from substantial workload and cost reductions as a result of, “Streamlining,” check acceptance and processing. Trips to the bank, armor car deposit pick-ups or merchant account transfer “Sweep Fees,” can be reduced to cover the needs of cash transactions only.

6. Coming Soon! - Merchant Reseller Program For Consumer Bill Payment, processing with access to over 5,000 of the leading payee’s provides merchants with another profit center that appeals to the millions of un-banked and/or cash customers. The number of payee’s is continuing to expand rapidly and includes everything from utility companies, to major department stores, mortgage companies, insurance companies and finance companies.

Each of the six (6) processing functions listed above and offered by American Payment Exchange requires software downloads to the point-of-sale terminal. This can be achieved by either using a remote software download deployment service during merchant down time hours or live downloads can by preformed.

For Check verification, Visa POS Check Conversion or Check Guarantee processing services the addition of a check imager device that connects to the Verifone Omni terminal or a PC cash register is required.

In addition to point-of sale transaction processing, financial services and products, American Payment Exchange offers web-based transaction processing services that can be administered and controlled by the merchant administrator. These services include:

Both, Online Electronic Check and Credit Card acceptance and processing

Electronic Check or Credit Card by Phone, acceptance and processing used for both inbound and outbound sales calls plus collection calls.

Online Shopping Cart Links, with unlimited inventory listings plus pay form options provide a high level of payment, fulfillment, reporting and control flexibility for online merchants.

Automated Recurring Payments, allows merchants access and control to set up, manage and activate customer recurring accounts receivable payments that can be paid either by the customer’s electronic check or credit card weekly, bi-weekly, monthly or quarterly.

Automated Recurring Payments make it as simple as the click of a mouse button to deactivate a customer payment when a customer account is closed or reactive when a customer returns and reopens an account. With Automated Recurring Payments the customer funds due are transferred and direct deposited into the merchant’s account automatically on the exact due date.

"Providing consumers convenience and payment transfer solutions business leaders depend on is our business"