GS Logo
The Green Sheet, Inc

Please Log in

A Thing
View Archives

View PDF of this issue

Care to Share?

Table of Contents

Lead Story

IRS says no merchant fees for 1099-K reporting: Who's listening?


Industry Update

PCI SSC seeks focus group topic

Visa outlines post-Durbin strategy

Is biggest Durbin impact loss of routing control?

FiServe CEO says Durbin good for tech spending

ACI thwarting S1-Fundtech merger

Trade Association News


An interview with Kurt Strawhecker

Ken Musante
Eureka Payments LLC

Banks counseled to meet the underserved

Patti Murphy
ProScribes Inc.

Research Rundown

Mobile payments present new sales channel

Gene Distler
VeriFone Inc.

Antiquated thinking could doom mobile payments at the POS

Biff Matthews
CardWare International

The green advantage

Selling Prepaid

Prepaid in brief

Streit says Green Dot exempt from Durbin

Winning prepaid's PR battle with regulation


Checks: Like the Energizer Bunny, they just keep going

Patti Murphy
ProScribes Inc.


Street SmartsSM:
Why MLSs should attend tradeshows

Bill Pirtle
MPCT Publishing Co.

SAFE Data notification bill: Does it go far enough?

Nicholas Cucci
Network Merchants Inc.

Working your P-L-A-N

Dale S. Laszig
Castles Technology Co. Ltd.

Company Profile

Blueprint SMS

New Products

Cloud-based document printing hits college campuses

Heartland Campus Solutions WEPA program
Heartland Payment Systems Inc.

Stop identity theft and fraud in its tracks

IdentiFlo Management Platform
Electronic Verification Systems LLC


The art of venting


Can new regulatory burdens become a competitive advantage?



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

August 22, 2011  •  Issue 11:08:02

previous next

Antiquated thinking could doom mobile payments at the POS

By Biff Matthews

While not the brightest bulb in a chandelier, I see critical problems in the practical application of mobile payment applications at merchants. I began my business career in retail management, so I have a bit of experience. I understand and embrace merchants increasing sales by taking transactions to where consumers make buying decisions on the sales floor.

To the merchant, how this happens is somewhat incidental. The "how" today is the race to merchant-oriented mobile payment apps running on a plethora of smart devices.

Whose devices to use?

I believe payments industry gurus are missing a critical factor that will be the downfall of mobile payment apps in retail. That is, on whose smart device will these apps be loaded and used? Application installation and use, just like transactions, don't just miraculously happen.

Is the merchant going to provide a smart device to each member of the sales staff? Is the sales clerk going to load the merchant's mobile app on his or her personal smart device? From a practical perspective, what have these sages been smoking to expect either to occur?

I'll share an example involving mobile apps in the tradeshow lead generation industry. At the example's end, ask yourself if there is a parallel with mobile payment apps.

Who controls the devices and apps?

A company, let's call it Izan, developed a tradeshow lead generation app for smart phones.

Typical of that industry, Izan rented smart phones with its app installed to exhibitors. Many of Izan's smart phones "walked away" because since they had retained their full smart phone capabilities certain exhibitors found them too irresistible to return. The rental fee was also less than the cost for a typical consumer smart phone plan. Duh!

Izan's next approach was creating similar apps for a variety of smart phones. For a nominal fee exhibitor personnel loaded the Izan lead generation app on their personal smart phones. However, once exhibitors loaded the app, they used it at one tradeshow after another, ending recurring revenue for Izan. Worse, some exhibit personnel found the apps had viruses, causing critical problems in their smart phones.

Here's the parallel with mobile payment apps. A merchant-provided smart device with desirable consumer functionality would simply walk out the door. Also, retail sales clerks are unreceptive to providing their personal smart devices for their employers' benefit.

That is like telling them to bring their own cash registers. Neither will they be open to loading the merchant's mobile payment app on their personal devices.

What's the solution?

Proprietary devices and technology abound within the retail industry, with inventory being their primary function. And manufacturers in this sphere, Symbol Technology for example, can and have adapted inventory devices to add POS and card functionality. However, their devices are expensive for retailers who have numerous sales associates. They are also too costly for even midsize businesses.

An important factor is the ability of these devices to integrate with inventory and other in-store systems to offer significant multifunctionality. Imagine a robust POS system in your hand versus a single function device or app driven by the card payments industry. When economies of scale at these farsighted manufacturers reduce equipment prices, retailers will flock to their hand-held POS systems.

In my humble opinion, the payments industry suffers from decades-old, myopic, self-serving thinking when developing single-function payment apps just as they created single-function, gray boxes - but why? Have our industry's gurus considered why retailers migrated from simple cash registers to fully integrated systems? Or why merchants shun single-function devices or apps?

The card brands, terminal manufactures and mobile payment developers touted throughout this and other publications have lost sight of who the customer is.

Biff Matthews is President of Thirteen Inc., the parent company of CardWare International, based in Heath, Ohio. He is one of 12 founding members of the Electronic Transactions Association, serving on its board, advisory board and committees. Call him at 740-522-2150, or e-mail him at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

previous next

Spotlight Innovators:

North American Bancard | Simpay | USAePay | Impact Paysystems | Board Studios