18 September 2014

Ritesh's Perspective

Ritesh Agarwal - On My Own

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Dongle based Mobile PoS is a waste of investment

09 May 2014  |  1778 views  |  4

In last decade, I have been swiping cards on the portable EDC machines, carried by Pizza Guy or even my Milk Supply person. They have had this machine for almost a decade and I "trust" this machine for it's form factor, apparant secured looks and ease of use.

Dongle connected to a mobile set, while offers 'Mobile' PoS; it rather creates more avenues of frauds, identity thefts than it solves any problem. I would not be comfortable if someone says that s/he would swipe my card on a dongle, which is connected to her/his personal mobile handset.

I am curious to understand what is the argument for anyone to invest in an obsolete problem of mPoS...!! What problem are they trying to solve, which already does not have a solution...?

TagsPaymentsInnovation

Comments: (6)

Amit Angarkar - Opus Software Solutions Pvt. Ltd - Pune | 12 May, 2014, 13:08

How do you know that normal POS machine is not hacked with custom application or hardware (e.g. skimmer) for that matter? 

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 12 May, 2014, 17:56

While there were a few mPOSs before SQUARE and there are many of them after SQUARE, the Silicon Valley startup disrupted this space by letting businesses accept credit card payments without needing them to get a merchant account from a bank, which they most probably wouldn't have managed to get. Few SQUARE competitors do this but SQUARE does solve a huge problem for such merchants who might otherwise have lost the sale. More details can be found on my sidebar about SQUARE in my Aug. 2012 op-ed piece in the JIBC journal (http://www.arraydev.com/commerce/jibc/articles.htm).

Ritesh Agarwal - On My Own - Bangalore | 13 May, 2014, 07:18

Dear Amit: Yes, normal PoS machines can't be trusted blindly as well; but they atleast don't create suspicion in their appearance itself. A dongle is perceived as a skimming device with zero reliability. Trust vanishes faster when it is a small merchant, using her/his mobile. No way, would someone be comfortable. If PoS is not trusted, then why create another devil...?

Dear Swami: Regarding opening avenues for small merchants, it has done that...but how? Let's look at that. Few countries while have allowed non-banking P2M players in mobile payments but many have restricted bank-based entry only. UK and India allow only banks to become member of mobile payment network. It means that NO merchant can directly hop-over the band-wagon. Square or others still need merchant aggregation, which everyone forgets conveniently. Also, pls know that commissions/fee are different for P2M Push vs Pull; which is the whole game about.

Anyhow, not to deviate from my topic, I can prove in as many points that companies like Square and dongle based mPoS is just waste of investment; which all such investors have better opportunities to invest in mobile payment systems. Shall write more about P2M separately.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 13 May, 2014, 09:27

From what I understand of latest developments in India, nonbanks can become members of mobile payment network - and even offer CI-CO feature at their agents' stores - as long as they obtain an MTO license from RBI. As a merchant, should I be bothered that SQUARE needs merchant aggregation, whatever that might mean in this context?

Ritesh Agarwal - On My Own - Bangalore | 15 May, 2014, 07:38

Dear Swamy: India does NOT allow non-bank members on mobile payment network but they can offer wallet services after getting license from RBI. Indian mobile payments are governed by NPCI and all have to mandatorily come through a bank, as a merchant aggregator. Yes, merchant needs to bother about the merchant aggregation, since not only charges but even the settlement cycle, loyalty and dispute resolution would matter a lot, based on capability of merchant aggregator. I suggest you a deeper study on this subject, as Square has failed and yesterday they have shut down their wallet business. 

http://www.mobilepaymentstoday.com/articles/square-drops-wallet-and-introduces-new-order-app/?utm_source=NetWorld%20Alliance&utm_medium=email&utm_campaign=SquaredropsWalletandintroducesnewOrderapp

I predict death of all wallets worldwide within next 1-2 years. This is infant mortality example and an example of bad problem resolution by some tech-geeks, which has no future. We need to evaluate the financials and user-experience before we lap any new technology, being thrown at us...!!

My question : What problem is being solved either by Wallet or  by Dongle based mPoS. Answer is loud and clear ... NONE. These are just time-expired fads.

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 15 May, 2014, 09:38

I'm sorry but it appears that there's a bigtime mixup between mPOS and mWallet here. These are two different products, with entirely different pains, target audiences and value propositions.

I partially agree with your views about mWallet and have written about the subject on several occasions myself e.g. Mobile Wallets: Fix What's Broken - And It Ain't Payments. However, mPOS, which is the topic of this post, solves a pain I've already mentioned. SQUARE *has not* shut down this product. 

SQUARE has shut down only its Wallet product. 

 

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Ritesh Agarwal

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