In 1980, a time when electronic payments were far from ubiquitous, Jean-Jacques Poutrel and Michel Malhouitre founded the small French startup Ingenico Inc. Their mission was to invent electronic payment terminals that would ease the daily life of both retailers and consumers. The company has since evolved beyond what anyone could have imagined 32 years ago. And now Ingenico is primed for the revolution in payments taking place on U.S. soil.
With over 17 million terminals deployed in more than 125 countries, Ingenico has documented a rich history of supporting emerging payment forms through innovative technology. It launched the first dual mag stripe and chip smart terminal in 1984, went public on the Paris Stock Exchange in 1985, and then expanded into such markets as Latin America, the Asia-Pacific and North America to claim an estimated 39 percent stake in the global POS terminal market.
In April 2012, when The Green Sheet interviewed Thierry Denis during the Electronic Transactions Association's 2012 Annual Meeting & Expo in Las Vegas, he had just completed his first year as President of Ingenico North America. Prior to 2011, the Ingenico veteran of 21 years had served as a senior executive in the Asia-Pacific region, including five years as Managing Director of Ingenico's Australian subsidiary.
Joined by a seasoned leadership team, Denis faced the immediate challenge of upgrading North American merchants to Europay/MasterCard/Visa (EMV)-enabled terminals, first in Canada and then in the United States, as mandated by the major card brands here.
"The two things that are really happening in this market are EMV and mobile payments, so all the players need to be aware of what is going on, what is available and making sure that they get ready for it," Denis said. "EMV is really our DNA as a company worldwide. We were always at the forefront of EMV. Now that it is finally happening in the U.S., I think that is key."
According to Denis, Ingenico has drawn upon its core Canadian EMV application as a foundation for the U.S. market. "We've got a base which is proven in Canada," he said, noting that the company is doing extensive customizing for customers in the United States. "I think that's what we bring on the technical level, that expertise in terms of what are the bottlenecks when you want to do EMV," he said.
Denis also pointed out that as a global manufacturer, Ingenico recognizes there are regional differences in how payments have been processed, historically. "You're going to have to train the merchants," he said. "It's a different way of doing transactions."
In the United States, where card transactions often involve a signature, the transition may take longer than in Canada, where cardholders were already accustomed to debit and PIN and were thus able to assimilate chip and PIN rather smoothly.
"It's not going to be an easy, simple transition like simply switching a terminal," said Svy Nekrasas, Ingenico North America Vice President of Marketing, who was also present at the ETA meeting. "This is a whole shift in paradigm, how you transact."
Nekrasas noted that in Canada, talk about EMV migration began back in 2003. "The actual transition happened last year, so there is a big time frame required for that," he said.
Gregory Boardman, Ingenico North America Senior Vice President, Software and Development, said in an ETA panel discussion on EMV that switching to EMV requires merchants to leave their comfort zones, and that Canadian merchants who didn't accept EMV were pressured by those who did. He also said reprogramming older equipment to support EMV is rare, except when a system is already enabled with EMV hardware and software.
Beyond the EMV mandates, Ingenico developed its POS technology to leverage merchants competitively. "EMV is not only for big-box retailers - EMV is for everybody," Nekrasas said.
"Today, all these devices that we're bringing to merchants actually put them on the same level as the big-box retailers, because they have the functionality, they have the ability to engage customers and they have multimedia capabilities, so they open up a different way of transacting," Nekrasas added.
To future-proof merchants' POS investments, Denis advises ISOs to also consider near field communication (NFC). "We don't know how quickly NFC is going to come up," he noted. "Now that we are looking at the mobile world, things are going out faster. You should probably hedge your bet and have at least a portion of your estate with NFC so that you can respond to the demand very quickly. I think it's very important."
Considered an early pioneer in contactless payment technology, Ingenico has invested heavily in research and development over the years, with approximately 25 percent of its staff dedicated to R&D. Teams are tasked with designing systems that integrate a multitude of payment forms, ergonomics, multimedia functions and state-of-the-art connectivity, as well as security that meets the latest certification standards.
One leading example was the development of the Telium 2 operating system platform. Because the platform can be deployed across multiple devices, it has reportedly streamlined production costs for Ingenico and simplified the process of integrating new applications and services, including loyalty and prepaid programs, as well as multiple language and currency options.
"What's important is when we take a customer through EMV, and they start investing in EMV with Ingenico, they know they can go from one device to another without having to change anything," Denis said. "It's all the same technology, the same platform. So to know that we rely on the same platform, the same software going from one type of device to the other is an added security and safety feature for the customers."
For ISOs, the iSC retail and iCT countertop series are the workhorses in the Ingenico line. The iCT250 model has a backlit keypad and LCD display; comes embedded with contactless, EMV and mobile NFC-based payment technologies; and offers serial, USB or Ethernet connectivity.
Built around the Telium 2 architecture and EMV level 2 kernel, the iCT series is PCI PTS V3 and EMV certified. An optional customer-facing iPP220 or iPP320 PIN pad can be added.
The new iWL mobile POS series is Ingenico's most compact and lightweight to date. The secure, pocket-sized iWL terminal accepts the same forms of payment as the iCT; it also features short- and long-range wireless capabilities.
"It's a very successful product worldwide, very successful in Canada," Nekrasas said. "We released it at the end of last year. I think it's going to be a big player in the U.S." where growth in mobile payments is expected to accelerate.
For merchants who prefer to process payments on their electronic tablets, Ingenico offers several options, "one being having the tablet and the iWL as a companion device, so the merchant can initiate transactions on the tablet and process payments on the iWL through a Bluetooth link," Denis said.
Another innovative product is the iSMP, Ingenico's Smart Mobility Payment docking sleeve, which is designed to convert any Apple Inc. iPod Touch or iPhone into a smart EMV chip and PIN secure payment solution. In partnership with iMobile3 LLC and ROAM Data Corp., Ingenico recently launched iMRP, an open mobile retail platform that integrates the iSMP to enhance in-aisle and on-site mobile sales.
In the first half of 2012, Ingenico formed a number of strategic alliances to strengthen its U.S. foothold. In January, the company enabled its POS terminals to accept PayPal Inc. payments, and in March it became a partner in Isis, the mobile commerce entity formed by JVL Ventures LLC. Also in 2012, Vantiv Inc. partnered with Ingenico to deliver EMV, NFC mobile and secured encrypted payments to its U.S. merchants. Chase Paymentech Solutions LLC selected Ingenico's iCT250 POS terminal for sale to U.S. customers. And The Phoenix Group signed a multiyear agreement to market the Telium product series to U.S. ISOs.
In addition, POS Portal Inc. recently became an Ingenico Telium product distributor for POS Portal's expanding ISO network.
"POS Portal is very much a technology-based company, and we strive to offer all of our clients a variety of equipment," said Joe Villamil, Vice President of Business Development at POS Portal. "Based on the relationship that we built recently with Ingenico, it appears they have a very strong commitment to the U.S. market.
"What Ingenico is delivering right now with their new line of Telium products are devices that are reasonably priced and prepare our clients for EMV, contactless as well as 3G wireless, which is something that is very important to all of our clients."
While Ingenico does offer its own On-Guard glos point-to-point encryption and tokenization product, the company also partners with other security solutions providers. For example, First Data Corp. integrated its TransArmor data encryption and tokenization technologies across the Ingenico Telium line for retail customers in the United States.
Voltage Security Inc. recently integrated its Voltage SecureData Payments end-to-end encryption technology with Ingenico's iSMP smart mobile EMV-enabled payment devices.
"By joining forces with Ingenico, we're able to offer retailers a high-security solution that enables them to accept mobile payments from customers while maintaining PCI compliance in their own store environments," said Mark Bower, Voltage Vice President of Product Development.
It is a point of pride for Ingenico that it is both comprehensive and versatile. "What we like to do with our customers is tell them that if you want us to solve every piece of the puzzle, we can," Denis said. "We can provide you with all of our solutions from A to Z.
"However, if you have a different partner in terms of end-to-end encryption, for example, we don't have a problem with that. That's what we want, to make sure that we're customer-centric and very flexible."
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