Behind a Web-Based Network’s Explosive Growth

A Web-based payments transaction processing program has been growing at about 400% annually since it branched out beyond the hospitality industry. When Las Vegas-based Shift4 Corp. developed its $$$ on the Net system for nearby resorts five years ago, the system was designed to allow the hotel, gift shops, casinos, restaurants, and other establishments within each resort to funnel all their credit card payments to the payment- processing company via one Internet connection. But in the last two years, the ability to reduce the processing costs from that of traditional dial-up transmissions and faster transaction speeds have allowed Shift4 to expand to a wide range of retailers, according to Eric Hoke, Shift4 manager of resellers. The two-second authorization times, for example, were attractive to Hoover Foods, which operates 40 Wendy’s locations. In the third quarter of 2003, Shift4 processed more than 9 million transactions, representing payments of $1.6 billion. That quarterly number surpassed the total number of transactions for all of 2002. The way the program works is that a retailer takes the payment on an existing integrated POS register. The transaction then moves to a back-office computer that has an always-on, high-speed Web connection, which sends the transaction to Shift4. From there, Shift4 sends the transaction to one of several major payments processors–including Paymentech, First Data, and Vital. Hoke says the cost savings come from not needing a stand-alone POS terminal as well as not having to pay for each transaction sent via a dial-up connection. The only thing required is an Internet connection for each retail site. Internet retailers can also use the service to process their card payments. Shift4 has direct salesmen selling the technology to retailers and also uses third-party partners, including processors, ISOs, and technology firms as sales vehicles._x000D_