Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
A Monthly Update on the State of the Mobile Point of Sale Ecosystem A PYMNTS.com Report Sponsored by ROAM
The May 2013 MPOS Tracker™ The operative words for May in MPOS Tracker land are software, verticals, and pain points. The MPOS game has an important new player - software. Hardware, once the be-all-end-all of MPOS, is regarded as a commodity. Multiple players have now emerged that can enable secure card acceptance across a variety of payment types - mag stripe, Chip + PIN, Chip + This report has added 5 new players to Signature - and so hardware suppliers no longer the MPOS Pyramid™ and offered new exclusively drive MPOS decision-making. insight into the range of players and What does is the ability for that hardware - whether services entering the space. mobile phone or tablet - to access apps that enable important front and back office capabilities. Some of The big takeaway: Hardware has those apps do fairly mundane yet important things, like become a commodity and one of the integrate with existing systems such as accounting and most valued players in the MPOS game is inventory, and some offer entirely new capabilities such software. Multiple providers have now as customer engagement, transaction history, CRM and emerged with apps that can enable data analytics. And even if all of those apps and important front and back office capabilities aren’t needed on day one, the ability to capabilities. Hardware suppliers are no access an end to end software platform gives merchants longer the only players driving decision an opportunity to scale their business in an efficient and making for mPOS cost effective way as those needs and desires arise. Now, it is also true that those apps are often correlated to the vertical in which the merchant operates. While both a QSR and a Direct Seller might both want and need inventory management capabilities, a QSR might need software that enables it to match food inventory to forecasted daily sales. This is where understanding the capabilities of the supporting MPOS platform is important – if it is an existing system, can it be easily integrated, and if it isn’t, can it easily be enabled via the platform? That brings us to the final theme for this month and that is pain point. Once upon a time, MPOS solved a really big pain point – lack of card acceptance – but as we’ve seen, the more powerful MPOS have become, the more appealing they have become to mid- and large-tier merchants who are looking for a more flexible POS alternative. That being said, it is so interesting to look around the world and observe how entrepreneurs are using MPOS solutions to solve pain points for merchants and consumers, such as
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
home delivery and the needs of corporate travelers doing such routine tasks as renting cars and paying for parking. With that in mind, here are a few key findings from this month’s activities: Cash, check or MPOS. The developing worlds are embracing MPOS solutions as a way to create merchant and consumer efficiencies at a lower cost. One of the most prevalent, yet inefficient online processes in developing markets is Cash on Delivery – the notion that consumers can shop on line and pay at the door when goods are delivered. This is done not because consumers don’t have access to cards, but because they don’t trust merchants to deliver the goods, and are fearful that if they don’t get their goods, that they will be unable to get a refund in a timely fashion. What an MPOS scheme can do is to offer consumers the ability to inspect the merchandise before payment and use a convenient way to pay. These schemes can also enable payment via bank account as well, as one enterprising MPOS-er in India has decided to pilot, which will be an interesting pilot to watch. Culturally, in India, at least, payment via bank account may not be of interest to many consumers. It’s the software platform, stupid. It’s sort of the razor/blade analogy, mobile payments style. In this case, hardware is the razor, and the software is the blade - that which gives the razor purpose, utility and longevity. Software capabilities and the ability of an MPOS platform to support a depth and breadth of applications is what will ultimately drive the sale of the MPOS bundle. It’s about specialty retail. Analysts report that 45% of all MPOS tablets systems are shipped to retail establishments, and specialty establishments in particular. The lower price points and higher number of value added features drives these trends, and certainly introduces another level of disruption to the acquiring community as it is reported that sales of such systems will cannibalize nearly 13% of traditional POS shipments in a few years. MPOS is in addition to, not instead of. New research suggests that while larger retailers are moving towards MPOS like shoppers to a sale rack, more than 85% of them are using them to serve as additional transaction points in their stores, and not replacements for their fixed POS stations. And, as we stated in prior reports, the appeal is to get closer to the customer, gather important data about that customer and increase sales. May 2013’s report features five new players to the MPOS Pyramid. The new merchant facing players are Mosambee, Monitise, PayTooSwipe and QFPay, and a new supplier, SubtleData. In addition, we’ve updated 10 players from prior months. They include the following merchant facing players: Groupon, Gopago, Handpoint, iZettle, NCR Silver, Square, Payleven, Paypal Here and SumUp and two suppliers, ROAM and CHARGE Anywhere. The MPOS Organizing Methodology: The MPOS TrackerTM Pyramid The organizing framework for the MPOS ecosystem is the MPOS PYRAMID™. It’s a graphic representation of where we think merchant facing service providers fit in the market. As stated earlier, it’s not designed to suggest that one part of the pyramid is better than another; but rather to depict the
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
characteristics of MPOS solutions. That means that the tip of the MPOS PYRAMID™ doesn’t imply the “best” it simply implies that the fewest players are concentrated there given the various elements of the service offering that those merchant facing players provide to their merchants. MPOS PYRAMIDTM Methodology We have divided the MPOS market into “layers” representing the broad set of capabilities included in the MPOS service offerings. This, we hope, more easily helps to categorize the MPOS ecosystem by focusing on the capabilities that the various players who serve the merchants in this market offer them. The “powered by” players are organized on the outside of the MPOS PYRAMID™ and aligned with the appropriate capabilities that they “power” inside of the pyramid. Here’s how we have used the MPOS PYRAMID™ to organize the MPOS sector. Core. Players in this quadrant offer only the basic hardware/ card reader solutions to merchants that enable mag stripe card acceptance and merchant processing services. Players in this space also have provided some level of security encryption, although the level of security varies by powered-by provider. This is where many players enter the market to establish an MPOS presence and merchant base. Core + Back Office. Players in this quadrant have offerings that provide value-added solutions that enable merchants and other SMBs to perform important back office functions. These functions include tracking/managing inventory, creating invoices, integrating with accounting systems and/or other applications thats assist merchants and SMBs in managing their back office. Core + Front Office. Players in this quadrant have offerings that provide value-added solutions that enable merchants and other SMBs to perform important customer-facing functions. These functions include loyalty, marketing, CRM and advertising solutions that enable merchants and SMBs to more fully manage support marketing, sales and customer retention activities. Core + Front and Back Office. Players in this quadrant have offerings that provide value-added solutions that enable merchants and other SMBs to support both front and back office functions as described above.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
Merchant/Consumer Network. Players in this quadrant have offerings that leverage mobile technology to serve both the merchant/SMB and consumer. These players provide core + front and back office capabilities along with consumer-facing applications such as digital wallets. These players use mobile devices and other assets on both the consumer and merchant side to create a network enabled by mobile devices (phones and tablets) and relevant applications. Open Platform/API. Merchant-facing players in this layer are serving merchants directly but have also made a decision to open their hardware/software services to developers via APIs. This is an effort to expand the number of merchants/SMB’s that they can reach as well as to make it easier for their own solutions to be enriched by other developers who can add functionality to the core offer. MPOS Player Profiles | New for May 2013 Mosambee Category When Launched #Customers/volume Customer Focus
Geographic Coverage Pricing
Core September 2012 120 readers and approx. 250 transactions a day Corporate Home Service/Delivery Markets in various “Industry Verticals” such as QSR, Insurance, Healthcare, Maintenance/Miscellaneous Services, Auto Aftermarket Service, etc. Merchant-as-ATM market in developing economies. India, Middle East and North Africa n/a
Mosambee launched its first pilot in Fall of 2012 in India after a soft launch in Dubai. The vision of the company is to adapt a mobile payment solution to the economies of developing countries where there isn’t wide (or even any) MPOS acceptance. One pain point that the Founders wanted to respond to home delivery, including Cash on Demand, which in developing economies is a very common method of sending and payment for merchandise. Using Mosambee’s solution, and leveraging its open payment tender architecture which can integrate with cards, checks, mobile wallets, bank accounts and loyalty payments, a merchant can deliver merchandise and be paid more easily. Currently the company offers a magswipe and EMV Chip & PIN solution and is developing a Chip & Sign solution for markets that see Chip & PIN as too expensive. In addition, Mosambee is exploring bio-metric (fingerprint) identification. The company is pioneering the use of merchants with their solutions as ATMs in the growing economies where Mosambee sees a need. The company is planning to expand into South East Asia and Latin America. An interesting target of theirs is the corporate market, such as car rentals, which provides a higher average ticket and a diversification away from the local “mom and pop” corner merchant. They recently raised a new round of funding ($1Million) from SIDBI Ventures to expand and scale the business.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
Monitise Category When Launched #Customers/volume Customer Focus
Core + Open May 2013 N/a All sized businesses
Geographic Coverage
Global
Pricing
n/a
Monitise MPOS was created to give the banks, mobile operators and acquirers a cost effective white labeled solution to offer their business customers. Its solution can layer onto existing services to create a more robust line of services and business management including real-time bank reconciliation, cash flow management and tabs on recent transactions. The solution may be added onto an existing Monitise account or delivered as an independent solution and branded for the client. The product is approved by Visa and Mastercard and can work with any acquirer. It is an EMV-ready solution, compliant with Chip & PIN, Chip & Signature and swipe transactions. The reader works with a Bluetooth compatible card reader and can integrate with a range of smartphones and tablets. Monitise uses a number of Visa-ready card readers and is not building its own hardware.
PayTooSwipe Category When Launched #Customers/volume Customer Focus Geographic Coverage
Core May 2013 N/A All sized businesses US
Pricing
n/a
The mobile wallet platform Paytoo entered an agreement with mobile payment provider Mobilepaid and Anywhere Commerce to create a MPOS solution that will support a variety of payment presentation technologies on a mobile device. With this reader, merchants can accept payment with mag swipe, EMV chip or NFC in addition to direct payments from the PayToo mobile wallet. PayToo’s core business includes VoIP, Prepaid Card and secure e-commerce payment transaction solutions. The PayToo Mobile Wallet combines carrier top up and mobile payments, all drawing from a single account and recently expanded to offer a Mobile Wallet with universal mobile capabilities. Mobilepaid’s flagship solution "Mobilepaid Wallet" is a white label platform that powers banks, MNOs and others offer MPOS solutions to their customers.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
AnywhereCommerce offers a proprietary suite of hardware, software and gateway solutions for secure online and mobile card-present credit card, PIN debit, Chip and PIN- EMV and NFC transactions and provides white label and customized application services.
QFPay Category When Launched #Customers/volume Customer Focus
Core + Open March 2012 30,000 merchants in China All sized businesses
Geographic Coverage
China
Pricing
899 renminbi (or just under $150) for the reader and .78% per transaction
QFPay launched in March of 2012 and is processing close to $400 million on an annualized basis. The PIN reader is large, designed so Chinese consumers will trust the security of transacting via a mobile device The company is hoping to enable card acceptance in a country where only a small percentage of merchants take card payments. The latest estimate is that only 5 million merchants of 100 million have POS machines. The company recently launched an open API to let third-party developers create payment experiences. Currently there are just 100 developers on the platform. QFPay is working on software to expand its offerings to handle CRM, analytics and loyalty products.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
MPOS Merchant Facing Players | May 2013 Updates
GoPago Category When Launched #Customers/volume Customer Focus
Core + Open August 2012 1100 Merchants SMB, Restaurants
Geographic Coverage
US
Pricing
2.85% per transaction +a 5% premium when consumers use its “line skipping” feature
Update - GoPago announced that it has expanded its MPOS service to be a complete in the cloud MPOS solution, integrating POS, online eCommerce, mobile point of sale (MPOS) and mobile ordering from smartphones with an open SDK platform. Groupon Category When Launched #Customers/volume Focus Location Pricing
Core + Front September 2012 n/a All businesses US 1.8% + $0.15 per transaction for Visa, MC and Discover, 3% for AMEX + $0.15
Update: Groupon has expanded Breadcrumb to enhance its offering to all retailers. Originally Breadcrumb only enabled nightclubs and eateries to accept payment and manage their businesses but Groupon has expanded the service to cover all brick and mortar establishments. Businesses are eligible for $5,000 in free processing as part of the POS launch. The system allows businesses to log all payments, accept cards, print and email receipts, calculate tax rates, view transaction history and issue refunds. Groupon, along with American Express came together to make an undisclosed amount (reportedy a double digit euro amount) investment in SumUp.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
Handpoint Category When Launched #Customers/volume Customer Focus
Core + Open February 2012 n/a All retailers
Geographic Coverage
Iceland and the UK
Pricing
2.65% per transaction and £9.99 and 1990 ISK monthly fee
Update: The company launched its service for a range of retailers, to expand its reach past small merchants. The solution was designed to meet the security requirements of larger merchants. Handpoint API was designed to make adoption by large merchants simple, while enterprise-level security is delivered by a point-to-point encryption (P2PE) on the Handpoint Chip PIN pad. iZettle Category When Launched #Customers/volume Customer Focus
Core + Open August 2011 50,000 Merchants Small merchants in Europe that don’t accept cards
Geographic Coverage
Sweden, Denmark, Norway, Finland, the UK, Germany, France and Spain
Pricing
2.75% for MC and Diner’s Club or 2.95% for AMEX
Update: iZettle has entered an agreement with a UK based online trade recommendation services provider. The two companies are preparing to launch a trial to enable users to accept card payments through smartphones or tablets. iZettle has also made an agreement with Spanish financial services provider, Banco Santander, to enable card payment with smartphones and tablets for its customers. In addition, the company has added a loyalty analytics platform to provide merchants with more detailed information on transactions. The updated merchant portal will display revenue, top selling products, transactions, average payment volume and returning customers.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
NCR Silver Category When Launched #Customers/volume Customer Focus Geographic Coverage
Core + Back + Front July 2012 200,000 Merchants Bringing big business technology to small businesses US
Pricing
Full hardware package is $599 a month to connect a mobile device. First device is $79/month and additional are up to $29/month. ($.10 per transaction up to $29).
Update: NCR Silver has partnered with Vantiv Mobile Checkout to provide a complete solution for single shop and small chain owners to manage their sales, inventory, marketing and customer relations. Square Category When Launched #Customers/volume Focus
Network February 2009 $15 billion in transactions annually All Merchants
Location Pricing
US, Canada, Japan $275/month or 2.75% per swipe, 3.25% in Japan
Update: Square launched the Square stand, specifically for the iPad. This stand turns the device into a card swiping register and enables wireless connection to receipt printers and cash drawers. The stand costs $299. The company has added key executives to its team, former U.S. Chief trade negotiator Demetrios J. Marantis and Francoise Brougher, a former global business leader from Google. The company launched this month in Japan, the first step outside of North America. Square is available in Japan with the support and partnership of Sumitomo Mitsui Card Corporation (SMCC). Responsible for introducing Visa to Japan, SMCC is widely recognized and respected for its ability to provide a wide range of solutions, including a comprehensive and highly secure credit card and payment solution. The cost is 3.25% per transaction. Unrelated to MPOS, the company launched a service, called Cash, which allows users to send money to one another via email. Similar to Chase QuickPay and the recent launch by Google to send money via Gmail, the payment will cost $0.50 to send and nothing to receive.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
Payleven Category When Launched #Customers/volume Focus
Core + Front + Open June 2012 n/a All merchants and private individuals
Location
Germany, The UK, Italy, Brazil, The Netherlands, Poland and Spain
Pricing
2.75%
Update: Payleven and MICROS kaching! Joined forces to create a cloud-based POS solution with integrated with mobile Chip & PIN card payment technology. The offer includes a range of features, including: instant setup with streamlined online registration, Pay as you go contracts, mobility, EMV Level 2 Devices, PCI complainant data storage and encrypted data. In addition, the solution offers real time data access in the cloud that reports up to date figures for sales, inventory and card payment settlement and powerful retail tools to generate promotions, discounts and add on inventory modules and CRM tools. Also, payleven’s Chip & PIN reader is now available for purchase in European Apple stores and through the Apple website where payleven is active.
PayPal Here Category When Launched #Customers/volume Customer Focus
Core + Network March 2012 200,000 Merchants All areas of business, merchants
Geographic Coverage Pricing
US, Canada, Japan, Hong Kong, Australia and UK 2.7% transaction fee, with no monthly fee. The fee for non-swipes goes up to 3.5%, with a $ 0.15 fee
Update: PayPal announced that it is offering free credit, debit and check processing to “qualifying” merchants that use PayPal Here. The announcement by PayPal didn’t specify what the qualifications are for free processing.
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
SumUp Category When Launched #Customers/volume Customer Focus Geographic Coverage Pricing
Core + Network August 2012 n/a Small to midsize companies that don’t already have terminals (taxis, craftsmen, market traders) UK, Ireland, Germany, Austria, Italy, Spain, The Netherlands, France, Belgium, Portugal and Russia 2.7% transaction fee
SumUp announced in late May that Groupon and American Express joined as the company’s newest investors with a double-digit million Euro funding. The company reports that they will use the new investment to support its expansion into new areas and build its technological leadership by improving its payment solution as well as its proprietary operations systems and hardware. Some of the funds will go to the development of new services. New Supplier SubtleData – SubtleData designs, develops and manages APIs that connect mobile devices to an existing point of sale terminal. Their ecosystem of developers build on their platform. Using their platform-as-asevice, developers can write and deploy many point of sale systems which reduces overall development time, cost and expands their potential customer base. MagTek partnered with SubtleData to give retailers an integrated, secure card swipe solution for their MPOS system. Update to Supplier ROAM – ROAM has expanded its product offering to include Chip & Signature mobile payment acceptance with the RP350x. With this addition the company is now able to provide mobile readers to merchants across all industries and geographical regions while complying with the strictest global payment standards. CHARGE Anywhere – Charge Anywhere announced that three of its solutions have successfully completed the registration and certification process to achieve MasterCard MPOS EMV compliance.
Ecosystem Analysis
Organizing the Mobile Point of Sale Ecosystem | May 2013
Appendix Core
Back
Front
Back + Front
Open
Back + Open
Front + Open
Network
BlueBamboo Circle it Up EverPay Flint iKaaz JUSP Mosambee Mswipe MTS POS O2 pay@mobile Payleven PayTooSwipe PocketPOS Softspace Spire/Thyron Swish Vantiv Visalus YES Bank
Adyen Cube Ezetap Intuit Gopayment PayAnywere RevCOIN Sage Payments
Citibank Corduro GlobalBay GoPago Groupon Mobile Pay On Demand MRL Posnet Revel
Kalixia Pro KWI Cloud9 Lightspeed NCR PaySimple Retail Cloud Sales Vu ShopKeep Spark Pay
Handpoint iZettle Monitise Miura Shuttle Mpowa Payleven QFPay
Payfirma
Swiffpay
Square PayPal Here SumUp
Key – Bold Italics is new to the pyramid as of May 2013 Mobile Readers’ Costs Player
Pricing
Adyen BlueBamboo Circle It Up Citibank Cloud9
€10/month Processing fee varies between 1.60% - 3.95% n/a n/a n/a n/a
Corduro
Varies, 2.5% per swipe and manual is 2.9% + $.20
Organizing the Mobile Point of Sale Ecosystem | May 2013
Cube EverPay Ezetap Flint GlobalBay GoPago Groupon Handpoint iKaaz
2.5% per swipe or 3.5% per key-in card information or integration into existing merchant account n/a Hardware Rs. 1500 1.95% - 2.95% + $0.20/charge n/a 2.85% plus $0.10 on transactions under $12 Swiped 1.8% + $0.15 per transaction, Keyed 2.3% plus $0.15 per transaction 2.65% per transaction and £9.99 or 1990 ISK monthly fee n/a
iZettle JUSP Kalixia Pro KWI Lightspeed Miura Shuttle Mobile Pay On Demand Monitise Mosambee
$12.95/month and 1.75% swipe and 2.75% entered or 2.75% swipe, 3.75% keyed without monthly fee 2.75% for MC and Diner’s Club or 2.95% for AMEX n/a n/a n/a $1,098-$3,875 per program for one license n.a 2.7%/swipe or 3.5% + $.15 per keyed in n/a n/a
mPowa MRL Posnet Mswipe MTS POS
25% or minimum charge $0.40 or £0.25 or €0.30. Or 2.95%, depending on country n/a n/a Between Rs.200 – Rs.300 per month
NCR Silver o2 pay@mobile PayAnywhere
Full hardware package is $599 a month to connect a mobile device. First device is $79/month and additional are up to $29/month. ($.10 per transaction up to $29) £20 for the POS and 2.75%/transaction n/a 2.69%/swipe
Payfirma
$25 set up fee + $10 monthly fee + 1.99%-2.92% + $ .25 / swipe. Minimum monthly fee $40 for processing less than $2,800/month.
Intuit GoPayment
Ecosystem Analysis
Organizing the Mobile Point of Sale Ecosystem | May 2013
Payleven
Cost of reader (£89 or 99€) + 2.75%/transaction
PayTooSwipe
n/a
PayPal Here
2.7% transaction fee, with no monthly fee. Nonswipes up to 3.5%, with a $ 0.15 fee
PaySimple PocketPOS QFPay Retail Cloud
$34.95/month and 2.29% + $0.29 / transaction n/a 899 renminbi for the reader and .78%/ transaction n/a
RevCOIN Revel Sage Payments
2.55% per transaction or 3.55% +$.15 when card is not present n/a n/a
Sales Vu ShopKeep Softspace
Spark Pay Spire/Thyron Square SumUp Swiffpay Swish Vantiv YES Bank
2.7% in the US and between 1.73% - 3.26% in Canada $49 for one register and $98 for two registers per month n/a Pro Plan $9.95/month plus 1.95 % for swiped, 2.95 % for American Express transactions. A la carte - 2.7% per swipe and 3.7% for keyed in transactions n/a $275/month or 2.75% per swipe 2.75% per transaction Vary based on country and type of business HK$498 for reader and 2.99% per transaction n/a Rs 2,000 and Rs 250-500 per month
Ecosystem Analysis
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
The MPOS Report Context The MPOS Tracker™ organizes the ecosystem into two broad categories: those merchant-facing organizations who supply devices to merchants directly and those who “power” those players and supply them with the MPOS hardware, software, tools and services that helps merchant-facing organizations meet their customer needs. This, we believe, helps to further establish and define the playing field in what has become a very active space. What the MPOS Tracker™ is: The MPOS Tracker™ is designed to offer an organizing framework for evaluting the many players that have entered the mobile point of sale (MPOS) sector. For the purposes of the Tracker, we will look at all mobile devices – mobile phones and tablets - and will profile players who enable commerce via either. Consider the monthly MPOS Tracker™ as our best attempt to give the payments space a “playbook” on the MPOS ecosystem and how it is evolving – a sort of “who’s on first” perspective of who’s in it, what their offerings are, and how the market may have evolved month to month. On a quarterly basis, we will do a “deep dive” into the vendors that play in a specific category. What the MPOS Tracker™ isn’t: At least now, this report isn’t a rating or ranking of the players in this space – this feature will be introduced in Q1 of 2013. It is also probably important to note that we take the information that is provided to us by the vendors as accurate – we have not done our own due diligence to inform the placement of the players on the MPOS Pyramid™. We will conduct diligence to support the rating/ranking feature once introduced. As we stated in our first report (October 2012), the MPOS ecosystem is moving quickly and this report is by no means complete – which is why we have chosen to do monthly updates. Further, information about the players is available in varying degrees of completeness. Details about volumes and shipments – the information that everyone finds most valuable – is not publicly available. In fact, our big wish is to publish an aggregate number of MPOS shipments so that we can track how this market moves in more quantifiable terms. We thank those who have provided us with that information, so far, but would more so that our report can be complete. We will not publish this information for any individual player but will only publish an aggregate number on a quarterly basis. If you would like for your numbers to be added to the total aggregate MPOS Tracker™, please contact us at
[email protected]. If you would like to be included in this report and/or would like your information to be updated, please contact us at
[email protected] and we will send you the data sheet required for submission. Further, if you would if you would like to be included in our ratings and ranking, please indicate this as well so that we can send along our more detailed questionnaire for you to complete. Why is MPOS Relevant? The diffusion of smartphones worldwide has revolutionized the payments industry in a variety of ways. Mobile phones are being considered (and trialed) in both the retail payments environment and the acceptance/point of sale environments. “Going mobile” today now means that both customers and merchants are able to gain tremendous efficiencies at a point of sale that can accommodate the form
Organizing the Mobile Point of Sale Ecosystem | May 2013
Ecosystem Analysis
factors that consumers use today - the plastic card – and move that point of interaction closer to the customer. Merchants large and small are able to gain business efficiencies as well as new customers and sales. Along the way, card readers have been transformed into tiny devices that plug into the headset jacks of mobile phones and tablets, turning these powerful IP-enabled computing devices into mobile point of sale terminals- thus the MPOS acronym. But the power goes well beyond card acceptance anywhere, by anyone. These mobile point of sale devices leverage existing payments functionality and infrastructure which means that the chicken and egg issues typically associated with new payments entrants don’t exist. MPOS card readers enable the acceptance of the plastic cards that consumers carry in their wallets today and like to use. MPOS may have started life as a way to enable casual sellers and small merchants to accept cards, but it is quickly moving up the merchant supply chain. MPOS actually started life way back in 2008 – before Square - in the mobile “field services” space enabling tradespeople and other field service personnel to deliver their services and generate both an invoice and a payment on site. Square applied this concept to the micro merchant who was unable to accept anything other than cash or check. Now, Tier One retailers are turning tablets into cash registers and moving payment and check out to wherever the consumer happens to be in the store. Clearly, MPOS is reinventing the entire commerce experience for all types of merchants and consumers. Quite naturally, given the “perfect storm” of mobile devices, consumers and plastic cards and existing payments rails, the market has seen an explosion of POS players enter the market. MPOS players can be divided into two camps: the dozens of players who supply devices to merchants and the universe of players who “power” those players and provide them with the MPOS hardware, software and enabling platform functionality needed to meet the needs of their customers. The capabilities of those who “power” the suppliers range greatly, and as a result, the MPOS offerings in market today exhibit a wide range of functions from basic payment card acceptance and processing (eg. Groupon Payments) to enabling a merchant/consumer network (e.g. Square).
