ABI Research tackled the expanding mobile point-of-sale market in a recent report and ranked providers based on 10 different criteria, all under the categories of implementation and innovation.
The London-based research firm concluded ROAM, an Ingenico company, was the best in class followed by iZettle and Intuit. Square, which ignited the mPOS sector, did not crack ABI’s top 10 list.
ROAM impressed ABI with its innovation efforts, which comprise a concerted effort to enable mPOS inclusion in all the major device types, including Android, Windows and iOS, the research firm said in a press release.
ROAM also boasts a contactless mPOS device capable of processing both EMV- and NFC-compliant transactions. On top of this, ROAM is able to leverage the business relations, partnerships and distribution channels of Ingenico. ROAM, along with the Ingenico, has a variety of mPOS flavors within its product portfolio, able to address all card transaction types to further increase product appeal and address all market types, ABI concluded in the report.
ROAM’s encompassing strategy is what put it on top of ABI’s list of 21 vendors, report author Phil Sealy told Mobile Payments Today.
“They are not just looking to sell to a particular market and are not limiting themselves in terms of opportunities,” Sealy said. “They do have Ingenio backing them, and they can leverage that existing customer base. ROAM can integrate mPOS into an existing Ingenico infrastructure, which provides a better opportunity.”
France-based Ingenico acquired ROAM in 2012 and helped the mPOS provider expand outside the United States. ROAM’s EMV capabilities should give it an edge in the U.S. as the migration to chip cards happens over the next 18 months.
“ROAM has a proven platform ready for the U.S. [and EMV migration],” Scott Holt, ROAM’s vice president of marketing, told Mobile Payments Today. “Does that mean we’ll suddenly have more [merchants] because we’re ahead of the curve? Yes, but I would say in the U.S. the reputation of our system helps us here.”
Holt identified the U.S. as one of the easier markets for mPOS providers to launch in because of a lack of EMV. He believes ROAM’s past experiences with EMV in Europe will help it in the U.S., despite the difficulties such an endeavor entails.
“Trying to get an EMV-ready solution [in the market] is much tougher than a lot of people think, but we were able to leverage all the experience [from Ingenico],” Holt said. “Once you do it once, you can leverage that experience again and again. We have many lessons learned that others haven’t yet experienced.”
Square’s current lack of EMV support, among other shortcomings, is what put the mPOS pioneer outside ABI’s top 10. Sealy declined to reveal where he ranked Square. ABI does not make its reports available to the media.
“In terms of market share, they have that going from them,” Sealy said. “They are doing very well in the States, which is a hotbed for mPOS deployments at the moment. But they fall short in EMV support. That has limited their potential, and that will have to be addressed.”
Sweden-based iZettle, which is considered the “Square of Europe” in the industry, ranked second behind ROAM thanks to its EMV capabilities, according to the report. The company also maintains a more flexible pricing strategy than its competitors in an effort to broaden its target market to include larger merchants.
Jens Münch, the managing director for iZettle in the United Kingdom, told Mobile Payments Today those larger merchants are not necessarily chains but businesses selling more in volume than the typical micromerchants that use iZettle.
Münch said one area that gets overlooked in the industry is a product’s ease of use, which can also help a company differentiate itself besides features such as EMV acceptance. In iZettle’s case, Münch said, the company matches what he calls a simple device experience with a pricing structure that offers discounts based on total monthly sales volume.
The company implements a pricing structure dubbed Smart Rate. Merchants start with the standard 2.75-percent fee on each transaction. At the end of the month, iZettle calculates the total fees for that month and sends cash back based on total card payment volume. The fee can drop as low as 1.50 percent per transaction. The company said it was the first mPOS provider in the UK to offer this type of pricing.
Intuit, which ABI ranked third on the list, did not respond to a request for comment from Mobile Payments Today.
Sealy addressed in the report a common industry assessment of the market, the eventual consolidation of providers. Consolidation can happen one of two ways: either through acquisitions or providers failing to gain adequate market share and going out of business.
“Consolidation happens with any nascent industry,” Münch said. “Companies will fall by the wayside because investment isn’t significant to [keep pace with others].”
Sealy predicts vendors will try to find their best place in the market in an attempt to avoid consolidation.
“To date, vendors have tried to develop an mPOS solution in tandem with their own transaction solution,” he said. “Moving forward, you’re likely to see more outsourcing of mPOS. You might see that going forward, as upgrades and development costs are fairly hefty.”
That providers are starting to white-label their products is a sign a split between hardware and transaction servicing is going to happen, Sealy added.