Debit at the Door

 
March 16, 2003

For a long time, customers paid for pizza delivery with cash or check only, and just in the last few years a limited number of operators have accepted credit cards at the door.

Now, with wireless payment terminals, customers can pay with debit cards as well. The delivery person merely swipes customers' cards though a hand-held terminal and allows them to enter a PIN. Immediately, data from the terminal is transmitted over a secure, wireless connection to a bank, which processes the transaction. The customer then receives a receipt, ending the transaction -- about four seconds after it started.

Wireless payment terminals aren't new to restaurants in Europe, but their use offsite is only beginning in the pizza industry.

According to Harry Chand, director of communications for Toronto-based Mobile Information Solution Technologies (MIST), a manufacturer of wireless payment terminals, Europe and Japan are stronger markets for wireless technology, such as text messaging and Internet access via cellular phones. But pizza delivery isn't the cultural fixture in those areas as it is in the U.S. and Canada, and he expects growth in wireless payment terminal use in pizza delivery will happen first in those countries.

A few individual pizza companies have tested wireless payment terminals (some Domino's Pizza stores in the U.S. began testing them in January), but for now, Panago, a 150-store pizza chain based in Vancouver, B.C., is the first company to apply the new technology chain-wide.

"We're not the first, but we're the first to do it to this extent," said Panago president, Sean DeGregorio.

MIST Freedom wireless payment terminal

DeGregorio said the company is using wireless technology because it offers customers the convenience they get in most other retail transactions; they don't have to write checks or fumble for cash at the door, and they don't have to pay additional fees for the service.

"We're trying to break down all the barriers possible to ordering a pizza," said DeGregorio. "We want to have all the methods of payment accessible to all of our customers so they can buy pizza from us."

Handy and Dandy

The MIST terminals used by Panago are a bit larger than a cell phone, and they transmit signals using cellular digital packet data (CDPD) modems. The same technology is used by banks and police departments to keep sensitive information secure.

At 9600 baud, the modem speed appears slow compared to high-speed connections used by personal computers. But the amount of data exchanged in such a transaction makes for a light load, electronically speaking.

"The network is very, very fast," DeGregorio said. "It has to be. When you're standing at someone's door, you don't want to wait forever for the data to go through."

Another tangible "security" feature with wireless terminals is the fact that drivers handle less cash when customers use cards. They eliminate the need for carbon receipts generated by low-tech imprinters, and customers can see the actual transaction amount displayed on the terminal before confirming the total.

Power Packed

Tom Harris, director of Panago's customer service technology, said the terminals have enough battery life to conduct roughly 200 transactions, far more than a full day's work for one delivery driver. The increased battery life alone represents a huge leap in practicality compared to when the company first considered using wireless terminals four years ago.

"The terminals then would promise about 60 transactions, when it was actually two," Harris said. "In our mind, there was no upside to having a wireless device at that point."

After a shift has ended, drivers place their terminals back into the charger for the next shift.

Each MIST-manufactured terminal also boasts a thermal printer that generates a receipt on the spot. According to MIST, the terminals use 32-bit RISC microprocessors, back-lit keypads and LCD displays. Each can hold up to four megabytes of flash memory (which holds data when the terminal is off) or eight megabytes of RAM (basically the terminal's short-term memory).

"They think it's really cool to bring that level of technology to the door on a pizza delivery."

Sean DeGregorio
President, Panago, Vancouver, B.C.

Panago rolled out its Debit at the Door program with some 850 terminals last March, but last year it ran a 90-day test in about six locations. The company wanted to see how reliable the terminals were and find the range and coverage of the wireless network.

While the test period revealed a few weak spots in the network, the signals were still strong enough to ensure transactions were completed. In all, DeGregorio said that the terminals held up well.

Debit card users in the test market apparently liked the terminals; Harris said debit transactions rose from an average of 22 to 36 percent of total sales. While it's still unclear whether the terminals will translate into higher sales per order, Harris suggests it's not out of the question, but insists that convenience is the main reason for implementing the program.

"We like to think of ourselves as a chain that prides itself on New World convenience, but keeps a focus on Old World quality," DeGregorio added. "We do that with Debit at the Door, one-number technology and in the way we design our stores with open kitchens."

Panago's partners in the venture are Scarborough, Ontario-based TELUS Mobility, which provides the cellular network, and TD Canada Trust, which handles the financial transactions and leases the terminals. Chris Langdon, director of product marketing for TELUS Mobility, said that a number of pizza companies, including Domino's, have discussed using wireless terminals in Western Canada.

DeGregorio wouldn't disclose what it costs to use the terminals, but Harris said Panago pays a flat monthly rate that includes TD Canada Trust's charges and network charges from TELUS Mobility.

While the terminals proved reliable in their first month in service, Harris suggested that delivery drivers need more training to use them. To ensure that problems can be resolved quickly, TD Canada Trust provides a help desk for Panago's stores, while on-site service visits are outsourced. Ideally, Harris said, Panago's staff eventually will handle the majority of the training.

After nearly a month in service, how do customers like it?

DeGregorio said reception of the technology has exceeded Panago's expectations.

"They think it's really cool to bring that level of technology to the door on a pizza delivery," DeGregorio said, adding that a large marketing program preceeded the rollout. "What we hope to gain from this is that it positions us as a company that is very innovative and forward thinking."


Topics: POS , Service , Telecommunications


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