How TNS Plans to Use Synapse to Boost Its ‘Stickiness’

When TNS Inc. announced late last month that it had bought U.S. Wireless Data's Synapse processing gateway, it said it was planning to use the gateway's non-wireline transaction capability to help open high-potential markets like fast food (Digital Transactions News, May 27). But equally important to the company's strategy is the gateway's technology itself, the company says. Synapse gives TNS new capabilities in both wireline and wireless configurations that will help differentiate the provider of transaction-transport networking, a service many see as having become a commodity at the low end. In response, companies like TNS are seeking out new and distinctive products to attract and retain business. “Not all commodities are created equal,” says Brian Bates, president and chief operating officer for Reston, Va.-based TNS. “The Synapse platform provides a lot of application-level intelligence on top of the transport layer. It's more stickiness for TNS.” With the gateway, he says, TNS gets beyond the basic business of routing electronic transactions from point to point in ways it couldn't before. The Synapse technology allows TNS to reformat transactions to suit the specific data-processing needs of clients, or to stand in for client processors if necessary, Bates says. Indeed, these new capabilities were key to making the deal with U.S. Wireless, which in March entered bankruptcy and announced it was putting its assets up for sale. “What was nice was the functionality of the gateway,” says Bates. “With that we can do a lot more with the data than we can today.” Such functionality, Bates argues, will be crucial in a market that has become highly competitive, particularly with the entry of HBNet Inc., a new data-networking unit formed by terminal maker Hypercom Corp. earlier this year (Digital Transactions News, April 14). HBNet, which is focusing on mid-sized and smaller processors, has begun serving two unnamed clients so far, with three more in the process of implementation, says Sharon Cline, the former MasterCard and Transaction Transport Technologies LLC executive who is running the unit. Contracts with another six potential clients, she adds, are being negotiated. HBNet entered the market with a conscious strategy of pricing transport service aggressively to undercut players like TNS. “We're getting a lot of interest,” says Cline, a senior vice president at Hypercom.