Over the past few years, point-of-sale (POS) systems have changed the face of card payments. This uptake has largely been because of the steadily dwindling use of fixed POS systems, which is owing to several factors and the advantages featured by mPoS systems. First and foremost, it is an expensive option. Also, the viability of such equipment is contingent to achieving a certain minimum transaction volume. Needless to say, these conditions effectively exclude small and medium-sized merchants and create an overcrowded marketplace for the big players. Moreover, these devices entail a substantial amount of upfront investment (in the form of rentals) and the cost of maintenance is quite steep as well.
Therefore, the need of the hour for small-and-medium sized merchants is a payment device which entails little or no expense in terms of deployment and maintenance. Moreover, the solution ought to adhere to approved standards of data and payment security via PIN authentication and all security certification standards. And last but certainly not the least; it should leverage both the mobile device and plastic money to the fullest.
Keep customers close with MPOS
In this context, mobile POS (MPOS) has emerged as a viable option and is often labelled as “disruptive”. The opportunity for MPOS is vast-it mobilizes the existing payment infrastructure, improves business efficiency, customizes services, strengthens consumer engagement and offers a secure transaction environment.
To illustrate, it mobilizes the existing payment infrastructure by extending card payments to new merchant segments such as home delivery merchants; on-the-go merchants and direct sellers. Moreover, it improves business efficiency by ensuring rapid integration of payment acceptance solution with core business operations and generating additional revenues streams with value added services for the merchant acquiring bank.
This is because it potentially drives down the price of regular POS terminals by as much as 50 per cent and offers significant value adds such as EMI payments, mobile top-ups, payment analytics and even cash and cheque reconciliation via its mobile app.
In addition, the fact that cash-on-delivery (CoD) has emerged as the most favoured payment method in many emerging countries also strengthens its business case. For instance, given that small and medium-sized businesses in India mostly accept ‘cash-only’ payments, owing to the large fee entailed in card processing deploying MPOS makes good business sense. It opens up an affordable channel to accept alternate forms of payment, from cards to the mobile handset. For the bigger retail players, MPOS could provide support in managing the workforce, sales force etc. by providing mobile-based inventory management, automatic sales records, etc.
Going forward, industry analysts expect a shift from MPOS to the mobile handset at POS. This would essentially entail customers using the mobile application to facilitate discovery and shopping. It would equip customers with stored value account to purchase good at POS and, most importantly, is expected to drive traffic to merchant locations by delivering an engaging shopping experience.
Net, net, to ensure rapid uptake, the acquiring bank ought to move beyond payments. This can be achieved by ensuring integration with services such as inventory management, customer relationship management, campaigns and loyalty management programmes, offers and coupons, etc.
