What Happens When the Terminal Goes Down –
and How to Continue Transacting

By: Biff Matthews, President, Cardware International

Credit cards, perhaps because of their age and universal acceptance, come with lots
of back-up.  A down terminal creates inconvenience when processing is manual, or
must be phoned-in, but generally doesn’t torpedo the transaction.  Not so for prepaids.   
Unless there’s phone-based back-up when the terminal goes down, this is plastic
whose only use is picking locks.

The use of prepaid, particularly gift and other stored value cards, is growing 
exponentially, particularly among young consumers, ethnic groups,  and those
who are not well-served by normal distribution channels.

Taken together, this describes a substantial sector of the buying population, and,
of course, prepaid is substantially more widespread.  Wherever prepaid is used,
however,  terminal reliability, and terminal support, is critical – arguably more so
than for any other payment method. 

Equipment reliability is never an absolute, but a few rules will work to your advantage. 
First, look for simplicity, as opposed to equipment that promises to do everything. 
Don’t over-buy capacity, or capability.  Beyond the cost considerations, these are what
cause collisions of software that leave you disabled on multiple fronts.  (Fax machines
that also scan and copy are a legendary example.)    Credit cards and prepaid
instruments operate on the same principle: trusting one device with both tasks
is not in your best interest.

The better strategy: seek simplicity with redundancy.  If you have two devices with
multiple capabilities, (a practical option now, as device costs have fallen) and you run
half your applications on one and half on the other, you can, when needed, load the
applications for the system that’s down onto the other device.  (I say “when,”
not “if,” for obvious reasons.)  

Run credit card and age verification on one device, and prepaid on the other,
and you’ll be back up and running until a replacement device arrives, without
needing a premium delivery service.

With sophistication comes complexity, and with complexity, a greater potential
for failure.  Many less complex devices are actually more reliable, perhaps because
they’ve been in the field longer, or because they just have fewer things to go wrong. 
Are there features which seem desirable, but are potential trouble-makers?  I believe
that devices that can run up to 16 different application fit this bill.  A device with
“only” 4-8 applications is less likely to have a software collision, and far less
likely to fail.   

The ease with which the terminal can be remotely downloaded is also critical for
restoring functionality.  Is this an easy task or an hour-long process?  Knowing the
process before you buy will save you time and aggravation later.

Other equipment criteria include compatibility with the work environment, and visual
features that make it easy for employees to learn and work with productively
(and intuitively.)  Good documentation is also important.     

Devices do malfunction, though.  Generally, this occurs on the first, or last of
the month, late in the afternoon, and/or on the first day of a holiday weekend,
when prepaid transactions spike. 

When (not if) this occurs, it’s critical that your support provider be set-up to ship
a priority replacement, regardless of the UPS schedule.  We emphasize two-hour
response times, and 24-hour equipment replacement for clients who need it. 
Of course, we’re at the mercy of the carrier, but priority shipping is do-able if you –
we – set the stage in advance.  And it’s what many customers want. 

But before decisions are made to ship anything, some other (easier) steps should
be taken.  If the merchant is using a DSL or internet phone system, or is direct
connected to a high-speed data line, don’t assume that the terminal is at fault. 
The newer technologies are more prone to failure than land lines and other
slow-speed systems. Before you decide to replace equipment, make sure you
check every link in the chain– hardware, software, where it’s plugged into the
device, where the device enters the wall, the jack, the wire termination at the
block, the central office.

High speed data lines have multiple channels, and when there’s a malfunction,
some, (almost never all) will go down.  It may appear the entire system is kaput,
but it’s not.   Confirm this, then examine your power source –stuff gets loose! 
Plug the phone into the jack and check for a dial tone.  If there isn’t one, you
know it’s your connection, not your terminal.  Teach employees to think in terms
of these basic steps before they even think of shipping good equipment, at great
expense, to places it doesn’t need to go.  

The choice of a transaction support service (“help desk”) is as important to your
business as virtually any other service, so no matter who you’re considering,
request and check out references.  Then, take your time.  The way you manage
transactions is a big part of your business, and due diligence, akin to what you’d
do for accounting or legal or any other critical services, is needed.  And for heaven’s
sake, don’t take a salesperson’s word alone.  Do what Reagan did – “trust but verify.”
The result won’t be as dramatic, but it will be positive and long-lasting nonetheless. 

Biff Matthews is President of Thirteen Inc, the parent company of CardWare
International. He is one of 12 founding members of the ETA, serving on 
its board, advisory board and committees.  (740) 522-2150.

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