Early Signs Are Positive for Amtrak’s Wireless POS Devices

Wireless card-payment devices deployed systemwide this spring by Amtrak to sell food and beverage items are making a favorable impression on passengers and boosting sales while cutting chargebacks, an executive with the national railroad says. Amtrak is now planning to start using wireless terminals to sell tickets on trains, adds Janet Langenderfer, senior director for credit cards at the Washington, D.C.-based company, which is owned and subsidized by the federal government. Formally known as the National Railroad Passenger Corp., 36-year-old Amtrak completed July 1 a three-month rollout of 400 wireless point-of-sale devices to all of its 300 trains. Langenderfer says that although she doesn't yet have precise figures, the company estimates sales are up between 10% and 15% so far compared to the comparable period a year ago. Sales numbers are hard to isolate, she says, because many passengers buy food and beverage service with their ticket purchases. Amtrak trains carry on average 67,000 passengers daily. Servers are using the devices, made by Santa Ana, Calif.-based Exadigm Corp., on dining cars as well as so-called café cars, which serve sandwiches and other lighter fare. Before the wireless terminals were introduced, servers took cards for payment with imprinters, with transaction slips forwarded later from train stations. Now faster transaction times are contributing to higher tickets. “Customers and employees are really appreciating [the wireless devices],” says Langenderfer. “Employees have really taken to it. Sales are higher so tips are higher.” The new devices, which list for more than $700 apiece before quantity discounts, have allowed the railroad to obtain online authorizations and capture more data on each sale, making for a dramatic reduction in chargebacks. “The chargeback rate was very, very high,” Langenderfer says. “We've practically eliminated all that.” Chargebacks now are running less than 1% of card sales, she says, though she won't say what the rate was before the new terminals were rolled out. Not only were bad cards a problem, but also passengers in many instances didn't recognize the typically small-value snack transactions on their statements, and challenged them. This was a problem particularly on commuter trains, Langenderfer says. Now Amtrak captures enough information, including specific train numbers, to make transactions more readily identifiable on statements, she says. Reducing chargebacks, along with shoring up the security of card data, were key factors behind the decision to go with wireless POS terminals, Langenderfer says. Indeed, the devices are part of a sweeping overhaul of POS systems Amtrak is conducting. Another factor was a mandate from Congress to improve food and beverage service. Amtrak began testing the devices last summer on its Boston to Washington, D.C. route, adding a California route earlier this year. One key consideration was the ability to capture and store transaction data in cases when cellular coverage was temporarily lost, Langenderfer says. The carrier for the devices is Verizon Communications Inc. The next step is to sell tickets onboard trains with wireless terminals. “We don't sell many tickets on trains, and we don't even allow it in many cases, but where we do allow it we will introduce it very soon,” Langenderfer says. For the time being, however, transactions will remain based on mag-striped cards. Although contactless transactions, which rely on radio waves to replace card swipes, have gained momentum in the past two years, Langenderfer isn't yet sold on the technology. “We're not sure what the value is to us,” she says. “When it makes sense, we'll do it.”