Remote Key Loading Good for ISOs And Retailers, Says Hypercom

Hypercom Corp. reports it is starting to see interest building in a service that allows merchants to inject new encryption keys in their point-of-sale terminals through network connections, eliminating the need to visit stores or send the devices out to have the job done. “It's been a pretty substantial effort” to build the service and make it commercially available, Stuart Taylor, vice president of global marketing at the Scottsdale, Ariz.-based terminal maker, tells Digital Transactions News. Earlier this month, Hypercom reported “escalating demand” for the service, which it calls HyperSafe Remote Key System (HRKS) and which it started offering in January. Taylor, however, will not disclose how many installed devices have had keys injected so far through the service, which Hypercom says is the first “standards-based” product of its kind. Two processors, Electronic Payments Systems and Mercury Payment Systems, have agreed so far to pilot the service with their merchant clients. “Remote key loading is a big deal,” says Taylor. Encryption keys are used by POS terminals to mask PINs customers enter when performing debit card transactions. The encrypted PINs are then unencrypted by issuing banks or stand-in processors and compared with the ones on file as part of the authorization process. Generally, merchants change these keys when they switch processors. But the job of installing new keys can be onerous for merchants with numerous devices, as it requires them either to send a technician to work on each terminal or to ship all the devices to a so-called secure room and wait for their return, which can take days or weeks, Hypercom says. By contrast, so-called remote key injection allows merchants to change out keys over the Internet or via phone lines, depending on the terminal's capabilities. Hypercom says its service transmits only encrypted keys. The process is more secure than shipping devices out, the company argues, because of its automation. “It raises the security level because you take people out of the process,” says Taylor. Taylor says the service also offers independent sales organizations a new revenue stream. Hypercom charges between $10 and $20 per injection, depending on volume. ISOs, Taylor says, are working on how to reprice that to merchants, which are paying $20 to $30 each way to send out terminals via an overnight service. “The market still needs to figure that [merchant pricing] out,” he says. Currently, HRKS works with the L4150 and L4250 multilane terminals, the L4100 devices, and the T4205, T4210, and T4220 countertop devices, though Taylor says “over time” Hypercom will extend it to all the company's terminals. The L4100, L4150, and L4250 connect to the service through a PC's Internet link. The T4205 and T4210 link via a dial connection, and the T4220 via its own Ethernet port.