Before we get to pay with our cards we typically have to queue at a cash register first and finally insert a credit or debit card into the POS terminal. That will start to change in 2015. Consumers will be able to cut the line because more and more sales agents will be equipped with mobile POS terminals – small high tech devices connected to smartphones or tablets in order to process our payments on the sales floor.
Although cutting the line is nice for consumers, mobile POS solutions are even more beneficial for retailers. With mPOS devices they can empower sales agents to extend sales to goods from the online store that will be delivered on the door step if not available in-store.
In 2015 more and more retailers will provide a better customer experience not only by providing a bigger choice including online products but also by allowing customers to cut the line and directly pay at the sales agent. The number of early adopters will grow in the US first because US magnetic stripe technology is cheap and easy to implement. We will also see first movers in Europe and Asia, although the EMV chip and PIN technology is more complex.
Why now? On the one hand it took ecommerce platforms like hybris or Demandware some time to provide in-store functionality. On the other hand the payment industry had to comply with new security requirements like higher encryption (DUKPT, P2PE). Right now technologies are available and certified and the retail industry puts the puzzle together in order to provide solid in-store solutions.
Established local banks and local payment providers will see more international competition in 2015. To date, POS terminals have been domestic and could only be used in a few countries. In each and every country retailers had to use different POS terminals and different banks.
In 2015 mobile POS terminal adoption will allow retailers to use one type of mPOS device globally that processes all kinds of cards including Visa, MasterCard or even China Union Pay (CUP) on one terminal. No need for several banks either. Payments can be processed through just one international payment service provider (PSPs) who can route payments to banks all over the world.
Apple Pay will speed up the deployment of mPOS technology in 2015 because Apple Watches and iPhones can also be used if retailers use NFC equipped mPOS terminals. A strong competitor to mPOS are QR code solutions like PowaTag that allow consumers to take a phote of a QR code, order and pay with their phone online. However, QR code solutions use online payments that are slightly more expensive for retailers than card present payments on an mPOS terminal. That might become an issue when in-store mobile payment volumes grow.
2015 could also be a year of smart merchants cutting significant costs for their PCI data security. Using mobile POS terminals has the benefit of the mandatory security requirements of Visa and MasterCard: mPOS devices and payment providers need to use high encryption standards (DUKPT) and comply with P2PE (Point-to-Point Encryption) standards. That’s the reward: By using this secure technology, retailers aviod any PCI DSS security responsibility themselves, which for international retailers can save costs in the range of millions.
This technology will also mean that anonymous in-store consumers will grow to be known repeat customers who can be rewarded. When sales agents order online products to be sent to customers they are identified even without a loyalty card scheme. With access to the customer profile sales agents will get a lot of flexibility to provide instant rewards. The technology is already available, however, 2015 will be the year of adoption.