Mobile Commerce

The Five Forces of mPOS

Players continue to zig and zag around the mPOS space yet common themes are beginning to emerge. The March mPOS Tracker highlights the five key things that all successful – and scalable mPOS solutions have. Want to see if your solution makes the cut?

The theme for March and mPOS was … distribution. Distribution that came in the shape of partnerships and those that came in the form of platform enhancements (e.g. SDK’s and APIs) that open existing platforms for others to leverage. Distribution is about achieving scale, and scale is about getting more volume – and the larger players in the space have scale and volume in their sights. What’s interesting about many of these partnerships is the extent to which they are now embedding digital wallets into POS systems to enable acceptance of mobile payments – not just card payments. Both Revel Systems and Square accept card payments, but are emphasizing integration with mobile wallets in order to accelerate payment using mobile apps and wallets. The other interesting observation is the extent to which the mPOS emphasis is also on those in the services business. Several players, including a large supplier/platform are focused on the SMB market in order to accelerate cash flow by accepting card payments for services instead of checks after an invoice has been generated and mailed. New research out of Australia shows that more than 60 percent of SMBs don’t offer credit card options. Solutions that bundle equipment costs with the cost of processing and make it affordable for small businesses with bigger tickets to use card processing seem to be emerging and taking root. But, having monitored and organized the mPOS ecosystem for the past 15 months, we believe that we are in a unique position to identify the 5 critical characteristics that mPOS players must now have to scale:

  1. 1.     Simple and transparent pricing models
    1. Even though mPOS is moving up market, its primary customer base is the small and medium enterprise. mPOS solutions are as much business model innovations that make it possible for SMBs to accept credit card payments as anything else as giving them the devices that turn their mobile devices into wireless credit card terminals. Being able to cut thru the clutter and noise of rates and pricing schemes and make it easy for merchants to know what card processing costs them has become table stakes.
  2. 2.     A scalable platform
    1. Although the SMB space is rife with turnover and churn, most small businesses want to grow their business. The ability to leverage a single platform that enables front and back office functions and that make it possible as they are ready to deploy them is what will make one mPOS platform more attractive than another and, therefore, sticky. These functions will also increasingly need to include the ability to accept digital/third party wallets and other unique payment types.
  3. 3.     Turnkey and easy to implement
    1. Businesses of all sizes want a simple and turnkey process for deploying mPOS solutions. SMBs, in particular are extremely time and resource constrained so turnkey and simple to deploy are now table stakes, including the ability to add on additional features as needed and desired.
  4. 4.     Reliable customer service
    1. SMB’s, in particular, want a friendly voice on the other end of the phone to talk to and some platforms and players are making service a differentiator. Great service can become a barrier to entry, make a platform or service provider sticky and upsell services.
  5. 5.     The ability to enable new revenue opportunities
    1. Card acceptance is no longer the revenue opportunity that enterprises are looking for in an mPOS provider. Many businesses large and small view mPOS as the starting point for capturing basic information about their customers but expect that there are features of the platform that enable them to do more than just assemble a mailing list. Being able to turn preferences, buying history and other basic data into customer intelligence that can be actioned is now the expectation of these platforms and providers.

Five new players joined the MPOS Tracker ranks this month: BeanStream Mobile, Globe Change, MicroBiz, MYOB Pay. The report also provides updates for seven existing players in the mPOS space, including Ezetap, iZettle, I Love Velvet, Payleven, Revel and Square. It also updates three 3 suppliers: ROAM, Infinite Peripherals and Swiff.

To see the full mPos Tracker report, click here.

mPos Pyramid

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NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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