How mobile can create new retail POS opportunities

By Mike Camerling, Director of Marketplace at AEVI

Retailers have a growing number of choices to help make shoppers’ payments fast and easy, while improving customer satisfaction and store operations. To a large extent, the momentum behind this trend has been fed by the availability of mobile payment systems.

For too long, payment and related applications were tightly constricted, based upon a fixed and generally inflexible countertop payment device. Early efforts to provide mobile payment solutions were largely clunky replications of those countertop systems, equipped with antennas. Meanwhile, smartphones and tablets were delivering non-stop innovation into the hands of consumers. Concurrently, eCommerce, driven by Amazon and a host of online providers, was providing fast shipping and price-matching capabilities. Bricks and mortar retailers began to despair.

Mobile opportunists

Savvy fintech startups spotted an opportunity to deliver mobile payment capabilities more simply and cost-effectively into the hands of smaller merchants, who were priced out of traditional payment solutions. They also began to siphon away merchants frustrated by vendor limitations and restrictions on legacy payment devices.

Dozens of venture capital-funded competitors popped into the direct-to-merchant market with propositions of free or low-cost readers for smartphones and tablets in exchange for transaction fees. This model, however, has limitations for merchants who don’t have their own in-house expertise for support. Many of these offerings also lack flexibility and are incompatible with third-party applications designed to complement the merchant’s payment solution.

Retailers are awakening to the realisation that a more mobile payment system enhances their ability to leverage sales, foster customer loyalty, and compete more efficiently with online alternatives. Although online commerce is changing the nature of shopping, and growing quickly, there is still room to expand: in the US, for example, fourth-quarter online sales represented less than 10% of total retail sales.

Nimble and adaptable

Every merchant, with the aid of the right service provider, now has access to features and functions that formerly were only feasible for larger competitors. In fact, smaller merchants have some distinct advantages over larger retailers, who are weighed down by the burden of supporting legacy POS infrastructure. This ensures greater flexibility in adopting more adaptable, relatively low-cost hardware and apps. Business Insider reports: “The shift to chip-enabled payment cards in the US has been a big driver of business for mPOS firms, because their devices are far less expensive than those offered [by] their legacy competitors.”

It’s fair to say most legacy payment-acceptance devices were limited to taking payments. Today, however, the payment device can be the hub of a rich array of merchant functions, including customer relationship management, multi-channel commerce, social media marketing, inventory management and more.

For merchants who want to focus on running their stores and pleasing customers, the mobile payments environment may appear cluttered and confusing. The monthly mPOS tracker from lists more than 260 “major players,” stacked in overlapping layers of features and functions.

Keeping up with consumers

Merchants know they need to keep up with consumer mobile trends – after all, many are avid smartphone users themselves. Merchants understand the value of easy access to a marketplace of apps that can complement mobile payment solutions, but they don’t necessarily want to evaluate hundreds of products.

This is the benefit of dealing with a specialist, such as a bank acquirer or independent sales organisation, that can guide them and provide support services, such as maintenance, installation and training. That’s not to say, however, they want to go back to the bad old days of being locked into proprietary hardware and limited applications.

Rather than serving as a source of limited-function proprietary devices, payments service providers can now provide a choice of multi-function SmartPOS devices from different hardware vendors. The added value for merchants lies in providing curated access to an open marketplace of apps that comply with payment and security requirements.

Break out of the box

Service providers no longer have to wait for large payment terminal manufacturers to deliver innovation. Instead, they can deliver next-generation payment devices based on open platforms and providing the latest apps and services. This allows them to leverage their unique market expertise and deliver true solutions that offer a choice of high-quality POS apps, services, and Android-based POS devices.

This empowers banks and acquirers to deliver compelling solutions tailored to a specific vertical market, such as hospitality or health, for example, or to offer highly customised, comprehensive business management suites revolving around payments. Just as important, service providers can respond quickly to merchant needs for payment options such as Apple Pay and Samsung Pay.

The adoption of mobile SmartPOS technology is rapidly changing the nature of payments. Merchants can rapidly respond to changing consumer behavior and easily explore the possibilities of multi-channel commerce. Payment services providers are finally able to take advantage of market momentum, instead of constantly pushing against the tide.

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