Scott Holt, Vice President of ROAM, responds to concerns some merchants — and maybe even some VARs — have about mobile point of sale.
Is mPOS less secure?
Mobile point of sale (mPOS) can be equally secure or even more secure than a fixed terminal POS solution, provided you are working with the right vendor. Why? There are several layers of security. The newest generation of mPOS solutions provide end-to-end encryption, which prevents hackers or other intermediaries from obtaining or tampering with any cardholder data. Secondly, these mPOS solutions never store any of the cardholder data on the mobile device itself. Third, since a mobile device is not hardwired into an in-store network, there is no single point or fixed communications line for hackers to exploit and penetrate these devices, or the data on the network. With so many precautions and security measures in place, vendors can easily incorporate mPOS without worry.
Do you have to sacrifice functionality with mPOS compared to a countertop-based system?
The most common use case for mPOS today is complementing countertop terminals with mobile ones. They are generally not meant to replace countertop systems, but rather to extend POS capabilities more broadly throughout the merchants’ operations — for instance, for in-store kiosks, curbside pickup, community events, and in-home services. Used in tandem, modern countertop terminals and mPOS solutions can deliver a cost-effective, robust, secure, and seamless alternative to the big, all-in-one electronic cash register systems that became popular in the 1990s.
But with that said, the newest mPOS solutions can actually provide merchants with even more functionality and unique capabilities than many countertop-based systems, with the added bonus of convenience and flexibility. Using mobile POS offers all the same basic payment functions (i.e., processing transactions, issuing receipts, performing refunds, etc.), but by leveraging the mobile technology and iOS/Android platforms, merchants are also finding they can leverage much broader business applications that serve a number of purposes outside of the payment “walls,” such as product recommendations, inventory management, and more. In addition, not only do mPOS systems accept debit and credit cards, many also have the capability to handle all types of mobile wallets, NFC transactions, and chip and PIN, and chip and signature cards.
There are two related trends here: we are seeing many merchants implement mPOS in order to experiment with accepting alternative forms of payment, such as mobile wallets, because it’s easier to integrate these capabilities with an mPOS solution, rather than to upgrade their entire fixed infrastructure. And, much like some U.S. households are abandoning landlines in favor of mobile phones, some smaller merchants are going right to mPOS, skipping fixed terminals entirely. This is due to the fact that the low cost and ease of implementation that mPOS provides makes it a much more favorable option for merchants looking to move beyond running a cash-only business.
Will bandwidth issues make mPOS unreliable?
Not at all. Even if a store’s POS system goes down, merchants can leverage a secure mobile card reader and an mPOS application to ensure they can continue accepting payments. And if the business happens to lose wireless connection, a merchant can still accept offline transactions if they’re using an advanced mPOS solution that offers this functionality. Some mPOS solutions also offer the option of failing over to Wi-Fi if cellular connections are not available.
Will VARs make less margin on mPOS?
Today, we are seeing more and more mPOS vendors offer APIs to ISV/VARs so that these technology companies can integrate payment acceptance into an existing software solution. These ISVs and VARs are then taking these broader solutions, integrating payment capabilities, incorporating their own branding, and reselling as their own offering. Some of these ISVs and VARs are highly vertical specific, while others provide a broader business offering that can be leveraged across industries and merchant tiers. While there is a revenue share agreement with any mPOS solution provider, it’s still a substantial opportunity for ISVs/VARs to leverage the work that has already been done on the payments side, rather than try to develop these capabilities from the ground up. By leveraging the APIs of an mPOS provider, ISVs/VARs are able to quickly and easily offer a more comprehensive solution, while still focusing on their core competencies. Margins will vary depending on the parties involved and the solutions they’re developing, but in most cases, it’s a cost-effective way for technology providers to extend their offerings and capitalize on the immense mobile commerce opportunity.
Will it only work on a specific device?
In most cases, consumer-grade tablets are just fine. ROAM’s mPOS solutions, for example, are designed to work with consumer-grade mobile devices, which are familiar to staff and also to customers. Depending on the different vertical or use case, some merchants prefer smartphones and some prefer tablets. A small merchant working a food truck is probably fine just connecting a reader to a phone, but a home services provider out in the field would most likely want to leverage the full screen of a tablet to do all of his day-to-day business tasks, beyond just payment acceptance.
Whatever the case may be, it’s important for mPOS solutions provider to work with customers to support their mobile device(s) of choice.