VeriFone has given up trying to sell Sail, its app and dongle-based system for turning smartphones into card acceptance devices, directly to merchants and will instead offer the technology to banks.
I’d suspect that the real issue here is the inability of Verifone to adapt its operating model to one that can work in a ‘micro-merchant acquiring’ environment, where the dynamics are significantly different and the key to success lies more in operational
efficiency with a much larger base of direct customers.
Verifone are not alone in this respect, many other players in the payments industry are used to dealing with a small number of large entities such as acquirers and processors, as opposed to a large number of small entities such as merchants.
Similar parallels can be seen in the ‘Daily Deals’ space, with many banks launching services intended to compete with the likes of Groupon, but failing to make the necessary changes to their sales and marketing workforce in order to truly enable ‘micro-merchant’
activities to become profitable.
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