Digital Transactions - November 2014 - (Page 16)
November 2014 digitaltransactions
Have a Future,
And It's Looking Good
By Kevin Woodward
Mobile POS services, integrated software, and migration to the EMV
standard are all influencing sales of terminals.
ast aside any preconceptions
about the imminent demise
of the standalone point-ofsale terminal.
That venerable device, which
symbolizes payments in the minds
of consumers-and recurring revenue
for payments professionals-is not
going away any time soon, despite
the seemingly burgeoning supply of
mobile POS services and the adoption
of integrated software.
The standalone POS terminal's
role in payments is not changing. It
will remain the primary acceptance
device for most merchants and consumers for many years. But how they
use it will change, especially in light
of three forces in motion now: the
transition to chip cards; mobile POS
devices; and the delivery of business
data in addition to payments.
Both in spite of and because of
these forces, the future of standalone
POS terminals appears strong. After
years of deployment, there are an
estimated 8 million POS terminals in
the United States, Javelin Strategy &
"There will be a place for the
standalone terminal at scale for quite
some time to come," says Thad Peterson, senior analyst at Boston-based
consulting firm Aite Group LLC.
"When dealing with the volume of
transactions that large retailers are
doing, there is a need to have something that is effective and efficient."
POS equipment makers have
honed the functionality and features of the devices, with many now
incorporating multiple communications technologies, advanced security
measures, and consumer-friendly elements like large display screens.
The Big Dip
Perhaps the single most important
factor spurring standalone POS terminal sales is the conversion to chip
cards. The U.S. payment card industry
is moving away from the magneticstripe card to one that employs a chip
that adheres to the Europay-MasterCard-Visa (EMV) standard. The major
payment networks have set a so-called
liability shift for October 2015 in
which the party in a card transaction
that cannot support EMV payments-
issuer or merchant-will be responsible for any resulting counterfeit card
fraud. Fuel-pump operators have two
years beyond that to convert.
Instead of swiping a credit or
debit card and placing it back in a
wallet or purse, both the consumer
and the sales clerk will need to get
accustomed to leaving the payment
* digitaltransactions * November 2014
card in the reader long enough for
the authorization process to complete.
That means a lot of changes.
Not only does the POS terminal
need to have a chip-card reader-
most sold in the past few years have
that technology-but it will have to
be easily accessible to the consumer
so she can dip her card into the reader
without relinquishing control of the
card to a cashier.
Though none of the larger POS terminal manufacturers-including VeriFone Systems Inc., Ingenico S.A., and
Equinox Payments LLC-discloses
annual terminal shipment volumes,
they along with many other manufacturers, such as Pax US, a unit of Hong
Kong-based Pax Technology Ltd., all
say the volume is healthy and growing.
"There's extremely strong demand
for terminals in the United States and
Canada," says Scott Holt, vice president of marketing for Roam, a mobile
POS company owned by Ingenico.
Retailers are making enormous
investments in their POS systems,
he says. That will lead to more integration of standalone devices into
system-based ones, and even integrations with tablet POS services, Holt
says. "That's going to be something
that continues to evolve," he says.
Other POS terminal makers have
"EMV migration continues to
drive sales for VeriFone," VeriFone
chief executive Paul Galant said
Table of Contents for the Digital Edition of Digital Transactions - November 2014
The Gimlet Eye: Don't Write off POS Terminals Just Yet
Trends & Tactiics
Acquiring: POS Terminals Have a Future, And It's Looking Good
Strategies: Behind the Acquirers' M&A Spree
Cover Story: The 10 Most Pressing Issues in E-Payments
Acquiring: Should They Stay Or Should They Go?
Digital Currency: Here Come the Bitcoin ATMs
Endpoint: Why It's Different With Apple Pay
Digital Transactions - November 2014