Blog article
See all stories »

The future of payments is more than payments

Despite a few technical changes that have occurred in recent years, until now the traditional payments landscape hasn’t changed much since the first payment card was introduced a few decades ago. The Point-of-Sale (POS) has largely retained its primary focus of allowing retailers to accept and collect payments from consumers. This is rapidly changing as several organisations are challenging the role of the POS and are looking to evolve the in store customer experience. They are doing this by bundling an increasingly sophisticated range of services such as loyalty and analytics as part of their core service offering. Traditional institutions must up their game or risk being left behind by merchants looking for more from their payments providers. 

With interchange fees making the acquiring landscape increasingly competitive, payments providers with fewer charges look set to become more popular than ever among merchants. For example, Square’s Register is a fully functional POS application that is available free-of-charge to retailers, with the merchants only having to pay the standard transaction-based fees. Others, such as Mobile payments player LevelUp are rolling in loyalty campaigns for retailers with no upfront costs. LevelUp’s fees are based on a simple success-based model for any credits that are redeemed by the consumer.

Analytics is another tool on offer from newcomers to the payments industry. One of the unique features of  PayPal Here’s recent launch is the ability to identify repeat customers via a mobile app prior to the moment of purchase. This gives the retailer the opportunity to offer a more personalised experience with the possibility of influencing the consumer’s purchase before they reach the POS.

Established players are also shaking the foundations of the payments landscape. Australia’s  COMMBANK has been working on a revolutionary mobile POS platform that gives retailers access to a wide range of services from both COMMBANK and some third-party developers. When it launches in 2013, it will already come bundled with several apps to enhance the customer experience. As the platform is open to third-party developers it’s only a matter of time before more apps become available.

In light of current and upcoming developments in the industry, traditional players such as acquirers and processors need to innovate and look for value added services that enrich the in store experience for both the consumer and the retailer. The ability to accept and collect payments is no longer a novelty for most retailers: the focus must shift to the provision of additional services that are bundled into the payment solution.


Comments: (5)

A Finextra member
A Finextra member 13 December, 2012, 13:16Be the first to give this comment the thumbs up 0 likes The future of POS is not just in POS itself (although that is an important element too). It's about redefining how customers interact with retail environment and personnel, I.e. shopping and payment flow. iPod was not only a "better MP3 player" (i.e. how consumer listens to music) - the key to iPod's success was... iTunes (i.e. how consumer buys music).
A Finextra member
A Finextra member 14 December, 2012, 09:35Be the first to give this comment the thumbs up 0 likes


Thanks for your comment. To re-enforce your point, I'd challenge whether the iPod was even a 'better MP3 player', as there were other better devices around at the time. However, as you stated the real success lay in the ‘total package’ that was provided by way of iTunes.

It’s true that the bigger picture is more around customer interactions as a whole rather than just the POS, but as the POS is so ingrained in the retail environment, it is in most cases the easiest place for retailers to start when looking at overhauling the customer experience.

A Finextra member
A Finextra member 14 December, 2012, 09:40Be the first to give this comment the thumbs up 0 likes


You got it right: the reason I put "better MP3 player" in quotes was precisely because iPOd was not a "better mousetrap".

As for POS and retailers, the best choice of POS (or no POS at all!) is determined by the type of retailer. Apple Stores show us where things are headed.

Masha Cilliers
Masha Cilliers - iBe TSE - London 14 December, 2012, 11:25Be the first to give this comment the thumbs up 0 likes

Good points!  I would also add that POS was traditionally needed because there was no other way for the card to communicate with the merchants system (short of off line zip zap machines).  Now that we have wireless and mobile communications one could argue that the need for POS is becoming less pronounced.. I see many merchants being in a position to do away with POS alltogether and just use tablets, phones and other such devices in the fuure.

A Finextra member
A Finextra member 17 December, 2012, 12:21Be the first to give this comment the thumbs up 0 likes

I always worry that the POS experience can be skinned and manipulated - that's why you keep the receipt confirming the amount debited in case you have a dispute about it.

I am in favour of replacing (or disrupting) the current POS equipment, but using insecure iPads and other mobile devices is a risk because the checkout experience can so easily be manipulated.  Needs careful implementation.

Member since




More from member

This post is from a series of posts in the group:

Payments strategies 2015-2020-2030

Payments systems visions, strategies, trends, pilots, forecasting, and planning for the short-, medium-, and far-term.

See all

Now hiring