Article
FYI: CDPD and VSAT are new ATM options
Don't look for CDPD and VSAT in a bowl of alphabet soup. You're more likely to find them at an ATM, where they're two of today's hottest telecommunications trends.
January 7, 2002
Dial-up, the darling of off-site deployers, remains the biggest trend in ATM telecommunications today. But industry experts think two newer technologies, CDPD and VSAT, may find market niches of their own.
CDPD, or Cellular Digital Packet Data, is a wireless communication that uses existing cellular phone system infrastructure. It was first used in the mid-1990s to authorize POS transactions without a phone line.
VSAT, or Very Small Aperture Terminal, uses a satellite network to transmit data. A small dish at each location connects to an earth station that acts as a hub for the system. It's been around about 10 years longer than CDPD.
Despite the emergence of these technologies, Bill Jackson, Triton's chief technical officer, thinks dial-up will remain the mainstay of off-site ATMs for several more years. "In 1999, probably 75 percent of the terminals we sell will be dial," he said. "The other 25 percent will be split in some fashion between CDPD and VSAT."
Noting that Triton introduced dial-up to the ATM market, Jackson said potential markets for CDPD and VSAT could be huge. "We were the pioneers in dial-up, and we believe we can pioneer these other communication technologies. A lot of other companies are selling dial now, so we look at it as another way for us to remain competitive."
Look Ma, no wires
While Brian Bates, senior vice president and general manager POS division of Transaction Network Services, said he doesn't see any "blockbusters" in ATM communications, he thinks wireless technologies like CDPD and Mobitex are making headway. Like CDPD, Mobitex provides secure wireless packet data connectivity, but it uses radio rather than cell phone infrastructure.
Bates predicts wireless options will continue to grow as more companies target ATM owners. "Until recently, you haven't had modem manufacturers focusing on the ATM market as someplace they wanted to sell into," he said.
Although at least one other vendor is converting ATMs to CDPD, Long Beach, Miss.-based Triton is the first manufacturer to offer the option straight from the factory. Triton has seen "a lot of interest, not as many sales," Jackson said. He thinks that may change now that CDPD has been certified by several large processors.
Triton bills CDPD as offering "leased-line speed at dial-up prices." A CDPD terminal can authorize a transaction in three to five seconds, compared to 15 to 20 seconds for dial. While an extra 10 seconds may not be a big deal to the average ATM user, it can be to a processor monitoring thousands of ATMs, Jackson said.
There is no monthly phone line fee and CDPD users pay for the amount of information sent, not the time it takes to send it. Since cell carriers want to promote the technology, they're willing to make some pretty attractive deals, Jackson said. "It's similar to what they did with cell phones, where you got a free phone or so many free minutes."
Because of its international, non-proprietary standard, CDPD should win the backing of vendors and deployers targeting foreign markets.
"It's the same in every country that has it around the world," Jackson said. "The advantage to a vendor like Triton is we can move into a country that has CDPD, and the equipment we sell here in the U.S. works exactly the same there as it would here."
Though it uses cellular infrastructure, Jackson said CDPD isn't prone to the reliability problems that plague phone transmissions. "It's an all-digital technology intended strictly for data communication, so it doesn't suffer any of the problems of regular analog telephones."
No lead time is required for installation, so it's truly "plug and play" technology. "Traditionally it can be set up with just a phone call to a cell carrier," Jackson said. "They'll give you an IP address, which is similar to a phone number, and once that's assigned you're ready to go."
CDPD's main drawback, Jackson said, is its limited availability. In the U.S., for example, many rural areas lack the necessary network. "If it were available everywhere like dial telephones, it would probably be the only thing we would push."
Sky's the limit
Another communications technology Jackson likes is VSAT. "It's probably the best technology for an off-premise location supporting multiple dial-up devices," he said. "For instance, a gas station may have as many as four or five dial-ups that can be replaced with one VSAT connection."
Triton ATMs will be linked to processors via VSAT in a deployment deal Portland, Ore.-based Card Capture Services made with Chevron. Because of its existing VSAT satellite network, used to process POS transactions, Chevron won't incur any new communications costs. The deal could potentially involve as many as 8,000 ATMs.
"The Chevron deal is very exciting for us because it gives us a chance to showcase this new technology with a very high-profile customer," Jackson said.
Chevron isn't the only big retailer aboard the VSAT bandwagon. Wal-Mart likes the technology so much it has its own earth station. Jackson noted that Hughes Network Services, the nation's largest satellite provider, claims to have 160,000 installations. "Potentially those are all customers of ours," he said. "Even if we could sell to 10 percent of them, that would be a nice number."
Affiliated Computer Services also has its own earth station. The Dallas-based processor first drove ATMs via satellite, less than successfully, in 1990. "If it rained kind of hard or snowed more than an inch, it didn't work," said ACS senior vice president Jim Stewart.
Now Stewart is so sold on the technology he's become "sort of a VSAT bigot." He likes it because it's quick to install and doesn't require the intervention of a phone company. Like CDPD, transaction approval occurs in as little as three seconds. And although initial costs are much higher than other communications options, satellite providers like Hughes offer a fixed price structure.
"It's as reliable, if not more so, than leased line. It's absolutely transparent to the user," Stewart added. "For a high-volume location that can't ever be down, satellite is a good option for us."
Still the champ
While interest is growing in CDPD and VSAT, Stewart estimated that 14,000 of his company's 15,000 ATMs are dial-ups. He doesn't foresee a dramatic change in the number anytime soon.
Bates, of Reston, Va.-based TNS, agreed that dial will continue to dominate the off-site market because of its low cost. "Everything else takes a back seat to cost," he said.
Triton's Jackson said decisions must be made on a case-by-case basis. "Three out of four features might make it a really good option, and that one feature would say it's just not right for this location."
He added, "These technologies are not going to replace dial, but they can certainly be used to supplement it."
Included In This Story
Triton Systems
Triton FI based products • NO Windows 10™ Upgrade • Secured locked down system that is virus/malware resistant • Flexible configurations - Drive-up and Walk-up • Triton's high security standards • NFC, anti-skim card reader, IP camera and level 1 vaults are all options • Triton Connect monitoring • Lower cost
