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Table of Contents

Lead Story

A new chapter opens for merchant cash advance

News

Industry Update

Strong positions in NRF lawsuit against Durbin regs

LinkedIn confirms breach, passwords theft

First Data, SecurityMetrics settle lawsuit over data access

Academy prepares industry for EMV implementation

Trade Association News

Selling Prepaid

Prepaid in brief

Google Wallet turns one

Obopay offers license to transfer

Views

Prepaid industry rewrites Washington playbook

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
How to avoid post-close mistakes

Jeff Fortney
Clearent LLC

Expanding e-commerce payments in China

Caroline Hometh
RocketPay LLC

Combating faceless fraud

Nicholas Cucci
Network Merchants Inc.

mPOS - it's about more than payments

Kevin Colaço
Retail Cloud

Company Profile

Cardinal Commerce Corp.

New Products

Swipe or tap, your choice

NFC Swipe
ROAM Data Inc.

Cash advance enters B2B world

B2B Cash Advance
Merchant Cash and Capital LLC

Inspiration

Disruption is good

Features

The value of CQ

Departments

10 Years ago in The Green Sheet

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

June 25, 2012  •  Issue 12:06:02

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mPOS - it's about more than payments

By Kevin Colaço

It seems every day we are inundated with emails, press releases, tweets and updates about mobile. It's all one stream of mobile: mobile payments, mobile POS, mobile apps, mobile dongles; it's mobile this and mobile that.

So there has to be something to this mobile world. It brings new players, transforms old partners and brings together sworn enemies. Against the backdrop of how consumers and financial institutions are driving mobile payments, companies are trying to redefine how retailers use mobile technologies.

Why is there such fervor for mobile?

One theory says every 15 years or so a new technology emerges that fundamentally changes the business landscape. Think personal computers in the '80s, the web in the mid-'90s and the cloud, particularily as it relates to mobile services, today.

Adopting new technologies blindly serves no purpose. Companies that are able to use the technology to redefine how they do business, and ultimately how business is done, will flourish.

An excellent example is Amazon Inc. The company used the web to change the way books are sold while the dominant players in the book space, Borders Group Inc. and Barnes & Noble Inc., used the web to list their store addresses and hours. In 2011, former upstart Amazon.com did $50 billion in sales, Borders went out of business and Barnes & Noble did $8.5 billion in sales. All adopted the web, albeit in different ways with different results.

Today, retailers are scrambling to adopt mobile solutions, and the mobile POS (mPOS) in particular. Recently, Nordstrom Inc. reported that it has over 6,000 mobile devices deployed and that by 2013 mPOS deployment would exceed that of traditional POS devices. One survey even indicated two out of three retailers are investigating mPOS options.

What do merchants expect from the mPOS?

According to a 2012 Forrester Research Inc. survey, 49 percent of retailers said their average order via a tablet is now higher than the average traditional web order. Nearly three in 10 retailers said they are seeing about the same average order value from tablets as from their websites. Clearly mPOS is making an impact on retail; the question is how should it be adopted to best benefit retailers.

On April 25, 2012, Motorola released an in-depth survey about mobile POS solutions. Over 20 pages long, it contains many statistics about mobile POS developments and the retail industry. After I poured through the data for the fifth or sixth time, I realized some of the statistics were conflicting and were likely caused by inconsistent definitions of "mobile POS."

In some of the survey's slides, it was apparent retailers considered the mobile POS as an engagement and interaction tool. In other slides, it appeared respondents were thinking of only a POS enabled for mobile devices. So I reviewed the slides again to see what secrets they would unlock as to what retailers felt the mobile POS was all about.

It became clear that the mPOS is considered primarily to be a tool to improve the customer experience by providing relevant inventory and service information. Notably, 71.3 percent of retailers expressed interest in mPOS solutions to improve the customer experience in the store.

While some retailers will, no doubt, use mPOS to ring up sales, this was considered a secondary, or tertiary, function. However, today most deployments and solutions, unfortunately, focus on the backward-looking function of ringing up sales and posting inventory movement to a central server.

What do merchants think of mPOS devices?

I also drew conclusions from the data about how retailers view mPOS devices, as follows:

Here are some findings that surprised me:

So what is the mPOS?

The mPOS must be a solution that can run on a low-cost device, with a screen that is large enough but not bulky. Ideally, it should be a tool store associates can use to provide consumers relevant information about product, inventory and pricing levels.

The device should also offer save-the-sale and close-the-sale functions in a simple, safe and secure manner. The mPOS system should be fully integrated into the retailer's operation, and solution providers ought to have expertise in mobile cloud-based solutions.

Finally, any implementation should address details like what happens when a customer wants a receipt and the process for store associates removing security tags and bagging items.

The mPOS is not a regular POS enabled for mobility; it is a much more effective tool that should be used to interact with consumers, ultimately optimizing their experiences with the brand. This may seem like quibbling about semantics, but consider that back in the mid-'90s Amazon, Borders and Barnes & Noble all had websites. I am certain we can all agree their trajectories were impacted by how they implemented the technology.

It is inevitable that tablets will become ubiquitous, and ISOs and merchant level salespeople are uniquely situated to benefit from retailers' urgency to implement tools to better engage their customers, in that payment professionals already have trusted relationships with merchants.

Offer them solutions that leverage mPOS capabilities, and build commerce as opposed to simply offering them a POS enabled for mobile payments.

Kevin Colaço is founder and Chief Executive Officer of Retail Cloud, which offers a range of cloud computing technology solutions designed to help small and midsize retailers maximize resources, improve customer service and increase sales . He can be reached at kColaco@retailcloud.com.

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

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