Going Wireless

New technology allows delivery drivers to accept credit cards

How do you handle the flood of orders, write down card numbers and approve charges while your phone rings off the hook? Welcome to the convenience of wireless charging.

Equipped with a cell phone or a pager and a portable card reader, your drivers can process credit card orders when they make deliveries, moving the point of sale (POS) terminal out of your operation and into the field.

Today, delivery credit card transactions occur over a landline telephone. When a customer pays with credit, you key in the card's numbers and send the information through a modem (and over a telephone line) to a credit processor for approval. When a driver delivers the order, he provides two receipts for the customer, one for the customer to sign and one to keep.

A wireless charging device works in a similar way but uses a wireless connection to send and receive information. Credit cards are swiped through a small magnetic card reader attached to a pager or a cellular phone that sends data over a wireless connection to a processor for approval.

"We're providing wireless point-of-sale terminals that look, feel, and operate just like the land-line or countertop point-of-sale equipment that you would see in a Domino's store, for instance," says Peter MacLean, senior vice president of Wildcard Wireless Solutions, Inc., a Vancouver, Canada-based company that provides card readers for Motorola cellular phones.

There are business benefits to using a wireless charging system. "The reason that a pizza operator or any other mobile merchant would want to use a device like this is in order to get the lowest rates available for swiping (a) credit card into a device," says Marc Shultz, vice president of marketing for U.S. Wireless Data, Inc., a provider of wireless charging solutions in New York City.

A wireless system may lower your cost of accepting credit cards because many credit organizations offer discounts for swiped transactions. The fee for a swiped transaction can be 1.25 to 1.75 percent less than a keyed entry fee, according to Paul Sabella, president and CEO of Next Day Funding, a merchant acquirer in Maryland that offers wireless charging services nationwide.

With wireless systems, drivers can carry less cash. This can lower the chance that they will be robbed or lose cash while making deliveries.

Also, your customers may want to use the new charging system because data sent through wireless devices is encrypted. Encryption ensures the data remains private and secure.

"It's clearly a more secure environment than having to read your card number over the phone," says Shultz.

Placing a POS terminal in the hands of delivery drivers, however, may not be the most cost-effective solution for your operation right now. "It has to be a combination of financial benefit and additional benefits, non-financial benefits, for a merchant to want to move to this," says Shultz.

The technology is still new. Before you make the jump into the wireless arena, you need to know how many deliveries it will take to pay for an individual unit, says "Big Dave" Ostrander, a pizza industry consultant in Oscada, Michigan.

"Early adaptors pay the most money. If you're doing 40 deliveries a week, how long will it take for the device to pay for itself?" he asks.

Prices for a wireless charging service package can range from $700 to over $900 per pager unit, depending on the type of pager you use, the card reader (referred to as the "sled"), the pager's software, if you select a portable printer and the level of service you pick.

Many pager services include monthly fees that range from $20 to $60 per unit, depending on the level of service you select. Monthly service packages may include a capability that allows operators to track credit transactions via an Internet browser. "They (the operators) can see very easily what is being owed. There's full reporting capability and real-time transaction access via our Web site," says Sabella.

Another service is the ability to store, track and process orders even when credit information isn't completely sent from a driver and back on the first swipe due to a bad or dropped connection. "We track a transaction from the moment it is created on the handset all the way through the network to the merchant processor and back to the handset," says Greg McKenna, Arizona-based Apriva's vice president of sales. Apriva provides wireless charging capabilities for pagers.

At press time, Wildcard Wireless's solutions were not yet on the market. However, the company was planning a test project with 58 Domino's Pizza stores in the United States and Canada. In the future you will be able to lease Wildcard Wireless services from major financial institutions, says MacLean. The basic charge will be $40 to $50 a month per unit.

Ostrander speculates an operator will have to sell quite a few pies to make one wireless unit pay for itself.

"The breaking point on buying that $900 (pager) unit would be about probably 500 to 600 pizza deliveries," he says.

Ostrander also warns that a pager and its accessories can be easily lost or damaged. "It's going to happen. Someone's going to lose one," he says. However, depending on the service you use, the pagers can be insured and easily replaced.

While the charging system may not be a practical solution for operators with a small portion of their sales stemming from deliveries, Ostrander says that some operators will benefit from the system - operators that regularly fulfill large corporate orders.

"If I had a pizzeria and was delivering to white-collar offices and banks and real-estate offices, and doctors and lawyers, it would make a pretty easy decision for me. I'd go ahead and do it," says Ostrander. "If I was delivering to mostly non-credit card payers, then I'd have to think, because it's a major investment."

Dana Norton is a Louisville, Kentucky freelancer.