It sure doesn’t look like mPOS is stalling.
With somewhere in the neighborhood of 200-plus players offering some flavor of mobile point of sale service – and new features and functions being added to those solutions all of the time – it seems hard to imagine that mPOS, as a sector, has leveled off.
Yet that’s the observation that Marcus Hodge, VP of Mobile Product Management at Verifone, shared with MPD CEO Karen Webster recently. Hodge’s view is that enterprise retail, which is where mPOS has perhaps its greatest potential, has hit a wall.
“In the evolution of mPOS,” Hodge tells Webster, “things really went into high gear about five years ago, when Apple successfully began using iPods in their stores. That was really the first true mobile point of sale that successfully grabbed some consumer mindshare — as well as that of retailers. Virtually every retailer wanted to get on the bandwagon and follow a similar model to what they had seen in the Apple stores.”
That, Hodge says, was the spark that ignited mPOS in a material way. Yet, a number of headwinds kept retailers from reaping the benefits they’d hoped for, first and foremost because “not all retailers are like Apple.” Different SKUs, varying store environments, diverse staffing models, and a broad range of security and consumer expectations introduce a variety of operational complexities.
Then, of course, there’s the whole issue of data security, an agenda item high on a retailer’s list after the series of high-profile data breaches that hit retailers in 2013-14. Putting payments security near the front meant that “some of the energies they were putting into mPOS really had to go on to the back burner,” said Hodge. EMV, Hodge observes, has also taken up quite a bit of retailers’ time and energy.
All told, remarks Hodge, “mPOS really hasn’t experienced much adoption. We’ve seen activity, but not as much as I think everybody had expected a number of years ago.”
While mPOS can solve a number of problems — particularly as the holiday shopping season approaches — Hodge stresses the importance for retailers to understand what is required of them in order to use mPOS to its fullest potential.
“There are a lot of boxes, if you will, that need to be checked off to make mPOS a success for retailers,” Hodge said.
No. 1, says Hodge, the solution has to be all-inclusive from a payments perspective. It must support credit, debit, EMV, contactless, NFC — and “any kind of wallet that you see out there.”
Secondly, data security will remain a core requirement of anything that retailers use for mPOS, ensuring that devices are not only PCI compliant, but also meet the end-to-end encryption standards that are critical.
Thirdly, it needs to be usable from a UI perspective. And, physically, it has to be lightweight and portable.
The fourth “box” is the integration aspect. “The greatest aspect of mPOS,” Hodge tells Webster, “is that you’re taking all of these aggregate systems that retailers use — inventory, price lookup, everything — and pulling them together into a tablet or a handheld, and into a UI that is ideal for store associates to use in their consumer interaction.”
Lastly, durability is paramount. “Retail environments present, for mPOS, some of the most demanding for any device,” Hodge remarks. “If an mPOS device’s battery doesn’t last, it’s not going to be mobile for very long.”
“Only when all of these criteria are available together in a single solution,” he adds, “will you see mPOS starting to take off. But that’s a lot of complexity [to put] in the palm of somebody’s hand.”
The requirements that Hodge mentions are not necessarily equal for large and small retailers. Smaller retailers don’t have large IT staff and need things to be simple.
“Truthfully,” Hodge elaborates, “[smaller retailers] want the integrated experience that you find at the larger retailers; they want to have that speed of checkout, ease of use, and the capability to present information in a meaningful way on a tablet. But it needs to be something that they can source and integrate to their systems very easily. It has to be simple.”
While EMV has impacted retailers’ ability to adopt mPOS as quickly as they would like, Hodge observes that it also creates an opportunity for retailers to “take pause and look at their systems: what they have and what they want moving forward.”
As retailers look to refresh their payments devices, they are able to consider the percentage of their estate for which they want mPOS capability, or whether or not they want to have a mix of countertop and mPOS devices. Moreover, the task of undertaking EMV gives them a chance to take a look at the overall architecture of their solution.
Hodge observes that “semi-integrated architecture is very attractive for a number or retailers, small and large, because it simplifies the overall integration of this technology--making life easier down the road, especially when it comes to EMV certification.”
These challenges and opportunities have been taken into account by Verifone in developing its new mPOS device, the Verifone e355.
Hodge describes the e355 as “the culmination of years of work in bringing a product to market that meets all of the criteria that we’ve talked about in the past. Its small, durable form factor has all of the payment functionality demanded by merchants…but most importantly, it has the flexibility to work with a variety of operating systems and tablets, as well as the physical flexibility to pair with different solutions.”
As he puts forth, when retailers can focus on integrating to a single product that can be leveraged across a variety of use-case scenarios or with a variety of smart devices, “it really simplifies things for them.”
“If you look back over the evolution of mPOS solutions,” Hodge continues, “most have been device-specific. They have been tailored to work with a particular tablet or smart device. When that device is no longer commercially available, that solution is no longer viable for the retailer. And that creates a restriction for them.”
He also notes that, beyond facilitating the standard payment capabilities of credit, debit, EMV, NFC and mobile wallets — the Verifone e355 can also plug into the commerce enablement initiatives that Verifone has brought to market.
“The device’s Wi-Fi capability and ability to integrate with our platform enables retailers to take advantage of loyalty, couponing, and digital media, and other very powerful capabilities,” said Hodge.
The product was released on the market earlier this quarter, and Hodge tells Webster that Verifone is “excited about expanding the 355’s use around the world.”
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