With these machines, service technicians and installers can get instant approval for credit card and check transactions without having to call their office to run a customer's financial information.

"The biggest advantage is being able to get an approval within seconds compared to waiting for the office to key in the information and get back to the mechanic with an authorization code," said Ellie Bastian of Kel-Aire, Rodeo, Calif. "Most of the time the office is answering a phone call and the mechanic has to wait. This is all nonbillable time and can waste as much as 15 minutes."

Maybe the key phrase in that statement is nonbillable time. All contractors are aware of the need to increase productivity and decrease nonbillable time. This is yet another argument for the viability of wireless credit card machines.

"Due to time savings and general ease of use, field technicians offer payment by credit card more frequently as an option when up-selling at the point of sale," said John Lehman of Cardservice Mobile Solutions, Boca Raton, Fla. "While this is hard to quantify, the fact remains that once field personnel cross over the new technology hump, they love this tool and encourage their customers to take advantage of it. Commissioned-based personnel use wireless credit card payment options to close otherwise difficult sales."

Another byproduct of wireless transactions is the positive impression it leaves on customers, giving the customer a good feeling about doing business with a progressive company. "You get the customer's signature," said Bob Etingoff of the Sansone Corp., Deerfield Beach, Fla. "But having the credit card machine in the field also is a more professional way of handling credit card transactions."

THE BENEFITS OF WIRELESS TRANSACTIONS

While being able to close difficult sales is a positive, just having the capability to close a sale in the field can be enough to have positive effects on sales. "I think just accepting credit cards in general has increased our sales, but I don't think being able to swipe credit cards has had any affect on sales," said John Pelizon, of Ace Pelizon Plumbing, Sewer, and Electric, Covina, Calif. "It has had a positive affect on accounts receivables and cash flow."

Pelizon also likes the costs of using wireless credit card machines. "The biggest advantage to us is the reduction in the discount rate you pay the credit card companies," he noted. "The investment into the machines gets paid for with the lower discount fees."

"In terms of return on investment, a typical merchant can save from ½ percent to 1 percent of the monthly cost in credit card processing fees," noted Steve Cochran of Semtek Innovative Solutions, San Diego. "We have seen systems pay for themselves in one to three months. Usually, the larger the ticket item the faster the return on investment. By far, Semtek's most successful customers have been in the HVAC industries.

"Another important feature is how economical the system is. The card readers retail for less than $280, and it is possible to acquire a Nextel phone for under $50. [Semtek's] Mobile Swipe is currently offered by a number of merchant services organizations, Wells Fargo, and Cardservices International being two of the largest."

While bells and whistles are good selling points, customers want to know if their transactions are secure and their identity is protected. The NEWS will discuss this issue in a follow-up article. Lehman, who said this is a hot topic, gave two ways that wireless transactions are protected from unauthorized use.

"The best step is to eliminate data storage altogether," he said.

"Most of the focus currently is on electronic capture of PIN and card data. The reason for this focus is that there are few remaining paper merchants of any size today. However, the entire field service group relies on the transfer of card data to paper work-orders and/or invoices as well as manual imprints of the customer's cards to protect them against chargeback at a later date. This creates the proverbial between a rock and a hard place scenario.

"Secondly, wireless platforms eliminate the need to write down card data. Terminal encryption protects against unauthorized use of the data captured for authorization and settlement purposes. In the case of the Mobile Swipe, the data is encrypted directly by the reader itself prior to transfer to the Nextel phone. It simply is of no use to anyone who is not in possession of the key to decrypt it at the other end. Triple DES encryption technology is the industry standard today."

Richard Howell of Commerciant L.P., Houston, noted that it isn't just credit cards that can be swiped in the field and offer another on-the-spot payment alternative. His company makes a product called Mobilescape 5000, which enables merchants to accept both checks and credit cards in one lightweight unit.

"For the first time, merchants in the field don't have to worry whether a check is good," noted Howell. "We also offer check verification and guarantee services with our check payment processing partners. Verification simply checks against a very large database to determine whether the customer has written bad checks. Guarantee means that when the check is converted, the merchants will definitely be paid. A third party assumes the risk of following up on and collecting on bad checks."

ARE THERE ANY DRAWBACKS?

Like any new technology, there are always bugs to be worked out of the product or system. Despite the many advantages and benefits of wireless field transactions, there are still some things to be aware of. For example, some customers will always be leery of giving out their credit card or personal check information over any wireless medium. Their logic is that the signal is unsecured and subject to theft. That is usually the biggest concern. But there is another.

"So far the only disadvantage we have had is in an area we call a dead zone," said Bastian.

"If it's an area we don't have any communication, then the mechanic has to call from the homeowner's phone."

Identity theft and credit card fraud are considerable issues. Watch for a follow-up article on how contractors can ensure the privacy of transactions.

Publication date: 04/17/2006