Recently, I was out shopping with my children and we saw a pay phone bolted to the wall near the checkout line of a store. It didn’t appear to be operational, but there it stood. “What’s that?” my 11-year-old daughter asked.
Of course, the question made me feel old. But I was also struck by the pay phone’s proximity to the checkout line. Working in the mobile point-of-sale (mPOS) space, I wondered if in 20 years, my grandchildren would see a traditional checkout desk and ask my daughter, “What’s that?” Just as the pay phone concept was disrupted by mobile phones, checkout stations are being affected by mPOS systems.
Merchants are facing unprecedented change. The pace of technological advancement accelerates each year, and sometimes merchants have to make very quick, tough calls on what to adopt and what to skip. In the U.S., the upcoming EMV (Europay, MasterCard, Visa) liability shift has further complicated matters.
Physical stores will no doubt continue to exist for many, many years. In fact, we are seeing a trend toward e-commerce companies opening traditional brick-and-mortar stores — something that was unthinkable in the heady e-commerce days of the early 2000s. However, the form factor for checkout will evolve to enable merchants to secure a sale as soon as consumers have made their purchase decision. Customers will also expect flexibility when it comes to checkout — and that may mean that rather than centralized checkout lines, merchants will need to offer options such as kiosks, roaming employees with mPOS capabilities on tablets, and may even enable customers to self-checkout via their own mobile devices. As retailers navigate the rapidly evolving mPOS landscape there are some important considerations to keep in mind. For example:
Insist on the latest security certifications and regulatory compliance: This includes PCI (Payment Card Industry Data Security Standard) and EMV, but also less stimulating terminology such as tokenization and layered security. The need for top-notch security should be obvious is in an era rife with security breaches. Yes many mPOS systems don’t incorporate the very latest security features. Beware.
While there is debate in the payments community about the merits of EMV, at this point it’s fait accompli. The U.S. is the only first-world country not currently utilizing EMV. Merchants must get prepared for EMV card transactions, and further they should assume they’ll need to securely process both chip and sign and chip and PIN transactions. Merchants currently in the market for payment processing technology that don’t consider these facts will find themselves with the equivalent of a Betamax system in a year or two.
Look for flexibility: Many merchants are concerned about emerging payments methods such as mobile wallets and Bitcoin. They want to accommodate customers, but not at the expense of security. Most merchants with which we work are taking a slow and cautious approach, but there are early adopter exceptions. We are currently working with one of the world’s largest fast-food chains on an mPOS solution — an overlay to their existing in-store payment infrastructure — that accepts open- and closed-loop mobile wallets, plus different types of card transactions (magnetic stripe, NFC, chip & PIN and chip & signature). We expect more of these types of projects in the coming year.
Look for application program interfaces (APIs) that allow for customization: When the first rudimentary mPOS solutions were introduced in the early 2000s, no customization options were available. Everything was served up out of the box, with little or no integration. Most were really just card readers, with no software except an interface to a secure card processing backend.
Today’s mPOS solutions provide powerful software that allows merchants to choose their own processor, integrate with back-end systems such as inventory and accounting systems, white label the user interface, and add features such as alternative payment type acceptance or loyalty program integration. Much of this is made possible by APIs provided by mPOS vendors. APIs enable merchants or third parties to easily integrate other systems with an mPOS solution, and also to customize features and interfaces as needed. An mPOS system that doesn’t feature APIs may not get along as well with other payments infrastructure and potentially restrict usage of new features in coming year.
Make sure fixed and mPOS solutions a seamlessly integrated for an omnichannel experience: Remember many merchants kept their brick-and-mortar and e-commerce units separate? It became a logistical nightmare, with major inventory and accounting issues. POS technology needs to be look at holistically – not in terms of fixed or mobile — because customers don’t view them separately. All POS checkout options — fixed, mobile or online — need to provide a consistent interface and backend to ensure customer convenience and better manage the omnichannel experience.
While it may not be possible to completely future proof a mPOS system, choosing one that can accommodate updates and new features is essential to allow merchants to keep up with the blistering pace of innovation in the retail technology world.
Jean-Marc Thienpont is COO of ROAM and EVP of mobile solutions for ROAM parent company Ingenico Group, a global payments industry leader.