Speeding Up Credit Card Transactions At The Track

Dale Jarrett, Jeff Gordon, Bobby Labonte, Dale Earnhardt, and other professional race car drivers know racing is all about speed. On the racing circuit, not only must cars be fast, but speed is also important to credit card processing. Racing Electronics employees know this first hand. The NJ-based company manufactures, installs, sells, and rents specialized communication devices, including headsets, for race car drivers and fans. Fans use the headsets to listen in on conversations between race car drivers and their pit crews. Since 1990, Racing Electronics has also designed the components used in drivers' helmets, including microphones and earpieces.

Fans of professional auto racing use credit cards to purchase more than $3.5 million worth of merchandise from Racing Electronics annually. Merchandise is sold by Racing Electronics through two retail stores, by mail order, and at racetracks across the country. Racing Electronics sells its products at races using four specially equipped trailers staffed by a total of 16 employees. Each trailer is equipped with four point of sale (POS) touch screen terminals, including magnetic stripe readers. The company develops and uses its own POS software. Forty-eight employees work in the company's headquarters near Atlantic City and at its newly opened retail store in Charlotte, NC, across from the Lowe's Motor Speedway.

Eliminating Customer Waiting Time
"Having many people in line just before the race, waiting to buy headsets and scanners, was common," said Dave Ryan, director of information technologies for Racing Electronics. "It was frustrating, both for us and for the customers, to wait four to six minutes to process each credit card." The problem stemmed from the use of cellular phones. "In order to process credit cards from our trailers at racetracks, we have to connect the POS terminals to cellular phones," said Ryan. "With thousands of people at the racetrack and the widespread use of cellular phones, it was difficult to connect to a cell. Without the cell connection, we were unable to process credit cards." At times, sales were made without proper credit card authorization. "We'd check driver's licenses and verify the credit cards later, after the sales were made," said Ryan. "Sometimes, those cards would be declined and we'd lose money. But what else can you do when 50 people are waiting to buy your product?"

Not only was this method of credit card authorization slow, the phone service was costly. "The phone service for each credit card transaction costs $1, and we do thousands of transactions each year," said Ryan. Hoping to increase the speed of transactions while decreasing costs, Ryan sought a new solution.

Combining Credit Card Software And Wireless Technology
"I talked to bankers and card processors. That's how I learned about Atomic Software," says Ryan. Atomic developed the Authorizer family of PC-based electronic payment software for use in the retail, Internet, and mail order markets. Ryan purchased the Authorizer software and the software developer's kit to interface with Racing Electronics' own POS software. "Our ability to use cellular digital packet data (CDPD) technology with Authorizer was an important consideration when selecting the software," said Ryan.

CDPD is a newer, wireless technology for mobile applications, developed and adopted by a consortium of United States cellular service providers. Designed for interoperability with the Internet, CDPD is a less expensive method for users of portable computing devices, such as laptops, to send and receive data over wireless networks. Specialized software on portable PCs transforms data into standard Internet protocol packets. The packets of information are then transmitted to the cellular system.

"CDPD uses modems to connect to cells," explains Ryan. "The cellular phones, connected to each of our POS terminals, stay connected to their cells until the modems are shut off. In the past, each credit card transaction was processed by connecting to a new cell. We were making a separate phone call for each transaction. With Authorizer and CDPD, we connect to one cell that is then registered to one phone, which is connected to one POS system. Data is transmitted back and forth from the POS system to the cell using only one connection. It's like making one long phone call. The phone company charges by the amount of data transmitted, not by the connection time. Transaction processing time was cut to six seconds." Bell Atlantic Mobile was instrumental in integrating the CDPD technology at the various racetracks with Ryan's POS systems and cellular phones. Racing Electronics also uses Authorizer in its retail stores and for its mail order business.

New Solution Provides Cost Savings, Boosts Sales
"Approximately 70% of the racetracks we serve have the infrastructure that allows us to use CDPD technology," says Ryan. "The credit card companies charge us 7 cents per transaction when we use CDPD. In our retail stores, conventional credit card authorization done over the phone line costs 5 cents per transaction." On the road, Racing Electronics is saving 93 cents per transaction and cutting down on its phone service costs. "Our sales are up this year, compared to last year, in some venues," says Ryan. "The employees have commented that business seems slower because the lines are shorter. But, in reality, sales are up and the lines are moving faster." Racing Electronics no longer verifies cards after sales are made, decreasing loss due to declined cards. Compiling sales data is also easier using Atomic's Authorizer software. "It used to take two full-time employees two weeks to close our books for one race," said Ryan. "Now it takes one person two hours. All the information is downloaded from our trailers to our headquarters using modems."

With faster credit card authorization and an expanded race season ahead — Racing Electronics has the green light for a profitable year.

Lisa Kerner