01 October 2014

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Balazs Fejes - EPAM Systems

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No More False Starts: Time For mPOS To Get Unified

19 August 2014  |  1698 views  |  0

The move to mobile point of sale (mobile POS) is radically changing the face of customer interactions and payments in certain sectors, particularly in retail, as both customers and merchants grow increasingly comfortable with the concept of mobile payments.  According to a recent study from research firm IHL Group, mobile in retail is now a $7.8 billion business worldwide while shipments of mPOS devices shipments are expected grow more than 95 percent worldwide in 2014.

 

Driven by technological innovation and changing customer expectations around service delivery the mobile POS story is moving retail stores away from the traditional queue and till model towards a model of roaming shop assistants and payments on the shop floor. Mobile POS embodies retailer’s desires to offer a seamless, 360 degree approach to customer payments, however, I believe the industry has some way to go before mobile POS can truly be hailed as the panacea for an omnichannel customer payment experience.

 

In the current, crowded marketplace most mobile payment solutions are not compatible with each other. Instead of unifying the payment experience they create islands separated by technology or usage that are tailored to individual providers in the market. Coupled with this are problems that exist in using the same channel for different payment instruments whether the customer is paying with a credit card, a PayPal account or with other currency such as Bitcoins. Multiple devices are currently needed in-store to process different payment types and the challenge for retailers is how they can make payments unified in such a way that only one device is needed in store.

 

The use of cash by customers is also adds a level of complication to the mobile POS story. The removal of IDM terminals, removal of customer queues and ability for customers to simply walk up and pay an assistant or to leave a store and have their bank card automatically debited certainly suits the expectations of customers today however a large number of customers still use traditional cash methods to pay for goods and services. A number of stores that have gone down the route of implementing mobile POS now have a problem dealing with cash because the wandering shop assistants and personal shoppers can only accept card or web-based payment options.

 

Challenges around functionality and the retailer back-office must also be addressed for mobile POS to be successful. At the point of sale a number a number of functions take place, including sale of the goods or service, inventory handling, pay-rolling and delivery. With a move to mobile POS these functions will likely need to be placed elsewhere because a hand-held device used by a roaming shop assistant is not necessarily going to be able to track inventory, payroll or perform other functions outside of the simple point, scan, payment and receipt functions.

 

The future for mobile POS has potential to be bright. However for this future to be realized a dominant player will have to emerge in the market – this will break down the technology barriers and usage barriers between different players and will drive down costs, which are currently not competitive. The success to mobile POS lies in the payment process being truly unified with one device in one place and very seamless workflow. This will be very complicated thing to achieve and as we’ve seen from the history of mobile POS there have been a lot of attempts and a lot of false starts.

 

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Balazs Fejes

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SVP and Head of FS BU

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EPAM Systems

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2014

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Meilen

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SVP - Global Head of Banking and Financial Services Industry Business Unit

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