A View From The Terminal Front
Some may argue that the merchant environment has been slower to adopt technology than other industries. However, like their corporate and government counterparts, merchants have turned increasingly to information technology to speed up checkout lanes, improve on-line credit verification times, and widen the acceptance of payment methods. No longer do merchants have to upgrade for the sake of having the "latest and greatest."
You don't have to look that far back in the history of point-of-sale solutions to remember when terminals were clunky, slow, and one dimensional. While we'd all agree that design advancements are beneficial to merchants and consumers, the real question is, how do technology trends affect the bottom line and ultimately drive sales?
For ISOs willing to take advantage of this information age, the technology changes offer opportunities to distribute more products with higher-end solutions to merchants. "The future of POS terminals is expanding upward and downward," said George Devitt, VeriFone's Vice President of Marketing for The Americas Division. "Today's merchants want to accept more payment options and implement additional applications. They are looking for the hardware and software solutions that will enable them to do that."
For
example, over the next several years, merchants have indicated they
will move beyond traditional credit and debit solutions and start
offering frequent shopper and loyalty programs. In addition, smart
cards will become an increasingly accepted payment alternative,
however, it remains to be seen if this will be a charge lead by banks
or by those who might be considered industry outsiders. A new study
by Killen & Associates reports that telephone companies are in
the perfect position to use smart cards to capture a significant
share of the expanding market for electronic cash and Internet
payments market.
The report, titled Non Banks' Smart Card Strategies: New Opportunities to Increase Sales and Profits, states that the electronic cash and Internet payments market will grow from 250 million to 25 billion transactions in 2005. Of those 25 billion transactions, 30% will be made by smart cards, thus enabling telephone companies to penetrate the cash replacement market beyond phone card payments, to include the Internet payments market.
According to Killen, the telephone companies will have a profound impact on banks, especially those in North America, since telephone companies don't have to worry about cannibalizing their own credit card and check payments businesses.
We already know that banks are dragging their feet when it comes to smart cards. Now we know who is in prime position to take advantage of this hesitancy.
"It's not a question of if smart cards will happen," says Devitt of VeriFone. "But, when?" And while vendors like VeriFone are producing the solutions to make debit, smart card acceptance, and frequent shopper programs happen, ISOs also have to take the lead in becoming more technology savvy, if the changes contemplated are to come quickly, and in traditional financial service circles.
"Right now, a lot of ISOs may only be familiar with debit and credit," Devitt added. "But we're already seeing the introduction of more sophisticated terminals and software in the marketplace from VeriFone and many European POS providers. Vendors and ISOs need to keep up with the latest trends to know what product line best fits customers' needs.
Over the next several years, technology will also play a big role for low end merchants with JAVA-technology, imbedded devices, and more paper-based merchants moving to electronic data capture due to the lower cost of entry for these devices," Devitt stated.
Yet, for those ISOs who are a little slow to jump on the technology bandwagon, there's also a familiar adage that applies to the state of POS-the more things change the more they stay the same.
