Tech startups from outside the payments industry typically focus their sights on payment schemes that eliminate or replace physical, stationary POS systems. But those firms may lack an awareness of the fundamental importance of the POS to retailers. That fundamental relationship between merchants and the physical hardware through which traditional payments are funneled is what drives the new in-store digital sales program from prepaid card distributor InComm.
InComm's in-store prepaid card racks display regular bar codes and quick response (QR) codes that consumers scan with smartphones, or alternatively URLs that users can punch into browsers. The codes and links take users to store-branded mobile web pages, where consumers can choose from various digital products, such as gift and calling cards. Once a user chooses an item, a bar code appears on the smartphone screen. At checkout, the bar code is scanned to complete the purchase.
The physical POS is central to the service. Digital transactions are always initiated at the POS via sales associates scanning bar codes off consumers' smartphones. With the practice known as "showrooming" literally stealing sales away from brick-and-mortar merchants, InComm believes retailers will appreciate a digital service that not only keeps sales within stores but actually encourages increased spending.
Showrooming is the practice of smartphone users scanning bar codes for the in-store merchandise of brick-and-mortar merchants to compare the prices for that merchandise at other businesses. If consumers can get better deals for the same merchandise, such as at online discount retailer Amazon Inc. and other web-based businesses, then those brick-and-mortar merchants lose sales.
Thomas Cornelius, Senior Vice President at InComm In-Store Digital Solutions, said the Atlanta-based distributor's new in-store solution exploits this showrooming habit for the benefit of merchants. Instead of catapulting consumers to the websites of competitors, InComm's QR code scanning keeps consumers engaged with the in-store experience. At the merchant-specific online stores arrived at via the QR codes, consumers can listen to the latest music releases, browse digital magazines and e-books, or view trailers for new movies.
"The beauty with this is that the whole store, and beyond the store really, becomes your sales floor," Cornelius said, with each destination in a retail environment enhanced by InComm's service. He noted that the service promotes rather than stifles impulse buying.
"We bring that back to retail, even for digital products," Cornelius said. "Through signage, through actually engaging the consumer on their mobile device, to now hear and see and view deeper information about that product and [allow them] to discover that product and then go out and purchase it right there and then."
Cornelius listed other benefits of the in-store service. With real estate for gift card displays in short supply and those displays dominated by national brands, the service opens up retailers to sell the virtual gift cards of local businesses. It can also be a boon for microtransactions. "By adding this digital layer, we have a complete new white space that allows us to expand in a lot of new exciting categories, like music, where we can sell nine million songs and albums and promote the artist instead of just promoting an individual music download card," Cornelius said.
Cornelius explained that this digital layer rests atop InComm's gift card processing capability that resides in every POS terminal at every retailer that processes transactions via InComm. In short, retailers don't have to upgrade terminals to utilize InComm's new service.
Cornelius said, "The worst thing you can do in that context is go to the retailer and say, 'Isn't this great. And because it's so great, it will only take you six or nine months, or 12 months, to integrate into your existing POS.'"
But InComm's service is different, as it only uses the POS to read codes off phones. "We were able to take the logic and certain rules out of the host-to-host integration, so that logic, intelligence doesn't need to reside within the POS," Cornelius said. "It resides in the cloud.
"Each retailer can immediately start supporting this program without any technical integration. The integration is already done. You're using the legacy integration to now bring the retailer into really a new era that allows them to have the consumer be engaged in their store, on their mobile device, and use that mobile device in combination with the cash register to sell digital value to the consumer." 
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