Magazine article American Banker

SPS Testing Digital Transmission for Card Processing

Magazine article American Banker

SPS Testing Digital Transmission for Card Processing

Article excerpt

SPS Payment Systems Inc. is testing the viability of the Integrated Services Digital Network technology, or ISDN, to process credit card transactions.

The company, which is based in Riverwoods, Ill., initiated a pilot program with Thornton Oil Corp., a petroleum marketer and longtime SPS customer, to "help determine whether ISDN can handle high volumes of credit card transactions processed in a retail environment," said Robert L. Wieseneck, SPS president and chief executive.

ISDN, also marketed as a virtual private-line service, converts analog telephone signals into digital signals, providing a transmission speed that's greater than that of regular, dial-up phone lines used by most merchant customers. As a result, ISDN will cut the amount of time it takes these customers to access SPS' credit-authorization network, company officials said.

Lower Costs Expected

SPS officials also expect the technology to provide speed and performance on a par with leased lines, but at a lower cost. Leased lines, used by some customers, provide fast credit authorizations because they connect point of sale terminals directly to the SPS network, rather than going through phone company central offices.

The time it takes to provide credit approvals over leased lines and over ISDN is comparable: less than six seconds, SPS officials say.

ISDN, however, can be less expensive in some cases. With leased lines, customers are charged fixed monthly rates, regardless of the number of transactions processed, whereas ISDN fees are levied on a per-transaction basis. …

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