Verifone gives up on Sail

Exiting mobile POS arena

Verifone Systems has withdrawn from the mobile POS arena after abandoning its Sail app. It will no longer offer merchants its dongle-based system for converting smartphones into card acceptance devices. Verifone has instead decided to switch its attention to the banking sector.

Sail was launched early this year in May in a bid to deter competition with a rising number of entrants such as Square and PayPal. The mobile-based service offers merchants a cheaper alternative to traditional POS systems. 

However, a review during Verifone’s fourth quarter results, the firms CEO Doug Bergeron spoke to Reuters: “Our experience through 2012 with tens of thousands of these micro-merchants tells us that the standalone economics of micro-merchant acquiring are fundamentally unprofitable. The only possible survivors in this fundamentally challenging business model will be companies who might have an opportunity to provide other services to these micro-merchants. You can see evidence of other competitors’ similar experience, as they shift their own business models to wallet.”

This has been exemplified as Square has moved away from its app and dongle roots towards its Walletapp and deal with Starbucks. This does not signal the end of Sail with the Verifone stating that it will continue to develop the service in relation to banks and acquirers rather than deal directly with merchants.  

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