The Christmas shopping rush has already begun. In the shops this weekend, I queued at the cash registers, opened my wallet and dutifuly entered my credit card into the POS terminal. It’s what we all associate with the traditional shopping experience. However, I predict that we will start to see a change in this behaviour as we enter 2015.
For example, if you‘ve shopped in an Apple Store recently, you get to pay the person that’s been serving you outfront, rather than having take your goods and queue at the till. In 2015, I believe we will see many more retailers offer customers this chance to jump the queue. It will become possible because of an increasing number of sales assistants who will be armed with mobile POS terminals. These are relatively small, high tech devices that connect to a smartphone or tablet and process payments on the shop floor.
Whilst queue jumping is good news for shoppers, mobile POS solutions are even better news for the stores. By using a mobile POS device, a retailer enables its assistants to extend sales from the online shop to products that can be delivered to the customer’s front door if they are not available in the shop.
Customers will have a far better overall experience. They will have a far larger choice of products which will also include online exclusives. It will also cut down the time shoppers spend queing in-store. Another benefit for the store is that the technology will enable them to track and reward customers who, previously, had remained anonymous. When a sales assistant orders items on behalf of a shopper, they are identified even if they aren’t a member of a loyalty programme. By having access to the customer’s profile in-store, the assistant will have the oportunity to provide instant rewards.
In early 2015, I predict we’ll see early adopters expanding with this equipment in the US. The magnetic strip technology over there is inexpensive and pretty simple to implement. Next up, we will see retailers in Europe and Asia moving forward with it, however, the EMV chip-and-PIN technology is a little more complicated.
For many, the mobile POS revolution seems to have taken a while to really become a reality. It seems to me that we’ve been talking about the possibiliities and capabiliites for quite some time now. However, justifiably, it took ecommerce platforms a while to develop reliable in-store functionality. This time gave the payment industry the time it needed to comply with new regulations and best practice guides, such as DUKPT and P2PE. And now, I believe the time is right for mobile POS. The technology is ready and certified, and retailers are starting to provide solid in-store solutions.
As a result of these changes, I also predict we will see more competition for traditional, local banks and payment providers in 2015, from international competitors. This will be made possible as the high adoption of mobile POS terminals will allow stores to use a single type of mPOS device globally. This device will enable retailers to process all varieties of cards including Visa, MasterCard or even China Union Pay (CUP) on just one terminal. There will be no need for different banks. Payments will be processed through one international payment service provider (PSP) who will co-ordinate the payments to multiple banks accross the globe. None of this has been possilbe to date, as POS terminals are mostly domestic and an only be used in a few countries. Up until now, the reality for retailers has been that they needed to use a different POS terminal and different bank for each country they wanted to process payments for.
Then there’s Apple Pay. No predictions piece on payment technology in 2015 would be complete without considering the impact that Apple Pay will have on the market. I believe that, almost instantly after its launch, Apple Pay will speed up the general deployment of mPOS technology. This will happen because both Apple Watches and iPhones can also be used for payment if a store deploys NFC equipped mPOS terminals.
And, of course, the question of QR. In my view, a question now looms over the future of QR codes too. As a viable competitor to mPOS, QR code solutions such as PowaTag enable a consumer to take a photo of a QR code, order and pay with their phone online. The reason their future is now not so certain is that QR code solutions use online payments that are a little more expensive for retailers than card present payments on an mPOS terminal. This may become a problem when in-store mobile payment volumes grow. We will have to wait and see how that particular one pans out.
Last, but by all means least, 2015 could well be the year that smart merchants significantly reduce their outlay on PCI data security. By using a mobile POS terminals they will have the advantage 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. By using this mPOS, retailers are able to circumnavigate PCI DSS security responsibility and save millions of Euros in doing so.
Saving money, simplifying processes, rewarding customer loyalty and cutting queues at the checkouts all sound like good sense to me. Whilst 2014 became the year that the technologies were developed to make all this possible, 2015 will be the year that we see it become a reality for most.
About the author
Ralf Gladis is CEO and co-founder of the global PSP Computop. Prior to founding Computop, Ralf developed databases and wrote books published by German IT editors. During the early years, Ralf acted as architect of the Paygate software, utilizing his technical background. Today, Ralf is responsible for international expansion and marketing.
About the company
Computop is a recognised global leader in secure payment solutions and fraud prevention. As a long established industry leader with a reputation for customer satisfaction and service excellence Computop draws on a unique partner network worldwide, impressive security heritage, and state-of-the-art technological platform in order to deliver global and innovative e-payment solutions that fit any multichannel business model. Computop processes payments at a worth of US$ 12 billion p.a. for white label partners and 3500 large international merchants including global brands like C&A, Fossil, METRO, Otto Group, Rakuten and Samsung.
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