The migration to EMV in the U.S., as MPD CEO Karen Webster discussed earlier this week in a live digital discussion, is putting a new face on point-of-sale. New capabilities including talking POS systems, large interactive tablet screens, and wearable devices are transforming the purchase experience for both merchants and consumers. In a recent interview, Webster sat down with Oliver Manahan, VP of U.S. Emerging Payments, MasterCard, to find out how that new face of POS is particularly valuable to merchants, the shift in POS power and the differences he’s observed across various industries as technologies evolve.
KW: Let’s talk a little point-of-sale. I’d love to get your perspective on what we call the new face of POS. Obviously, we’re in the middle of this big migration to EMV. That’s literally putting a new face on the POS for many merchants, and with that new face comes contactless capabilities and lots of other things merchants can take advantage of like Apple Pay. What does the new face of POS mean when thinking about these new capabilities for merchants?
OM: That’s a great question. At MasterCard, we tend to focus more on the payments side, so it’s definitely exciting to be able to think about not only providing more security through EMV but also new ways for merchants to accept new types of payments – Apple Pay and other types of contactless form factors, even wearables.
We’re looking at a couple of reports recently showing the average merchant device is something like 7 years old, so back in 2008, the box that was considered a POS was really a utility. Maybe a small screen with a couple of buttons on it that said credit or debit, to the world we’re in now that’s essentially a tablet being used as a POS, with a larger screen. Even the traditional POS now has larger touch screens – it becomes more than the ability to accept a payment, but rather to interact with the customer and show them which loyalty offers come up next.
As we move to a world with a lot more innovation and experience with a larger, faster, more interactive display, there’s a lot more merchants can do in that space.
KW: So it’s really putting a face on the POS environment, where the face really didn’t do anything but convey the transaction. Today and in the future, it can present a lot more information that’s valuable to the consumer. Is that what you’re saying?
OM: Exactly. I had a recent experience in Canada last week with a talking POS device. In the first instance, it told me I could insert, tap or swipe my card. But a talking device can also say other things such as, "Did you consider adding soda to your pizza order?" There are lots of things beyond the display that can be done with these new devices that open up opportunities for merchants.
KW: Let’s talk about the consumer and their device. Today, it’s a mobile device – who knows what it will be in the future – that’s becoming the POS. So the POS becomes more under the control of the consumer, versus under the control of the merchant. Do you think that’s a possibility, and if so, how far away are we from that?
OM: It’s difficult to say, but from a technology perspective, I think we are very close if not there already. In fact, if you look at Square where you plug in to a mobile device and that becomes an acceptance device, and you start putting security around there with things like EMV dongles, there’s nothing to stop an NFC-enabled phone from becoming a POS device.
I am not sure that the refrigerator, for example, is a logical spot, it also may not be illogical. If I don’t feel like making my weekly trip to the grocery store, if I can do voice recognition and say I need milk and eggs, buy them, and within the next 24 hours that gets delivered to my store, there’s no reason why that fridge or connected device couldn’t be a POS device.
KW: Are there differences you’ve observed by industry as you think about the evolution of the POS? For example, the restaurant sector – that seems to be an industry where there’s a lot of change happening with respect to how the actual transaction happens and checkout takes place. What are your thoughts there?
OM: There are at least a few verticals that come to mind, and certainly the restaurant space is one of them. When we see markets that are migrating to EMV, where a portable device gets to the table, which instantly creates a more secure environment. Your card or device isn’t removed from your line of sight. Then it also does auto-tipping, and scoring, asking from a scale of 1-5 how the food or service was. There, merchants can get real customer insight as opposed to using a website to survey people; who knows if they actually visited the restaurant and who that person is?
When you think about other experiences, taxis are quite neat. Many in major metropolitan areas actually have contactless devices in taxis, but then Uber offers a great user experience. It’s still a payment-based MasterCard transaction, but you don’t have to take out any payment card. It’s frictionless and secure.
KW: Uber and the ride-sharing alternative to taxis out there are as much about payments as they are about taking the friction out of getting reliable taxi service. There’s always the tension between what’s possible with technology and what merchants and consumers really want in a POS experience. What are you hearing from them with respect to their expectations?
OM: Everything comes down to the consumer experience – even merchants would agree. They just don’t want something that A) adds friction, and B) makes someone push so many buttons that it becomes harder than swiping a card.
I know that when I shop, I love to be able to tap a phone or card. It’s nice to get through as quickly as possible – that’s a simple use case on the merchant and consumer side. But from research, we understand that merchants and consumers are both concerned about securing payment data. That’s where EMV and chip comes into play. Then, I think once you’ve got the basics of a secure, frictionless, easy to use payment service, that’s where merchants and consumers become interested in what else can the mobile device do – for consumers, can it add value beyond the payment experience? For merchants, can they deploy a device that does more than just accept payments and interacts with a customer?
I think secure, simple, frictionless payments form the baseline we’re striving for.
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Vice President of U.S. Emerging Payments, MasterCard
Oliver Manahan is the Vice President of Emerging Payments with MasterCard.
In his role, Mr. Manahan is responsible for managing all aspects of MasterCard’s chip programs. Mr. Manahan has been with MasterCard since May 2006 and works closely with customers in defining and executing new payment strategies.
Prior to joining MasterCard, Mr. Manahan was with Visa Canada for nearly a decade in the emerging products area. Mr. Manahan started his career in the Information Technology field, with companies such as Mercedes-Benz and Pepsi.
Mr. Manahan is MasterCard’s Board representative on the Smart Card Alliance and co-chairs its Payments Council.