BY KLAUS SCHÖPFLIN
Innovation pressure at the POS terminal / checkout
The global development of the payment market is building up innovation pressure for the German “POS terminal” market. Terminal manufacturers, payment service providers and users, i.e. merchants, need more and faster innovations around the POS terminal. The more innovation, the easier it is to increase end-customer acceptance and customer loyalty, make inventory management more efficient, and enable new sources of revenue. In addition, POS terminal innovations help to boost POS terminal sales.
Such innovations can already be realized in many areas today:
- Integration of online payment methods (alternative payment methods), such as Alipay or WeChat who offer both customers and providers new opportunities.
- Innovative functionalities can improve entire operational processes, e.g. by connecting POS terminals to cloud systems, monitoring & system solutions, flexible checkout interfaces that can be adapted to a variety of POS systems.
- Loyalty systems, such as offers for regular customers, bonus programs, discount promotions, could be connected to POS terminals and create real-time benefits for customers.
Current challenges
The current generation of terminals in use has a proprietary and monolithic software architecture. As a result, enhancements to payment applications on the terminal are not only very tedious and lengthy, but also expensive. In addition, they require re-certification by credit card organizations and local debit schemes.
Another challenge is the software applications on the terminals, as these are both vendor and product specific. This means a very high effort to roll out innovations in the inventory of an acquirer or network operator.
In addition, regulation hinders the rapid spread of innovative solutions. Due to certification requirements, such as PCI certification, a service provider must coordinate with all participants in the payment value chain. As a result, the market as a whole is very complex, and innovations are often nipped in the bud.
Is there any way to avoid this?
Is there any way to avoid these challenges, the effort, and the costs?
In the future, there will come smartPOS solutions from the major terminal manufacturers that are able to map innovative applications in their own apps via the Android operating system. However, the whole thing is not a scalable approach in the next few years, as the first smartPOS terminals are just being released in the German market.
Furthermore, there are currently around 900,000 POS terminals in operation in Germany. The question is how to bring innovation to these terminals.
Innovation in POS terminal inventory through SHC’s VAS Cloud
The VAS Cloud enables the necessary innovation in the POS terminal inventory. It offers a vendor-independent, open platform as the basis for activating and rolling out value-added services at the POS – and does so outside the regulated system environment.
Among other things, the VAS Cloud enables:
- Area-wide access to cashier stations with POS terminal
- Easy activation of services overnight – without technical conversion projects
- Access to 70%+ of the current POS terminal inventory – independent of the network operator or acquirer
- High scalability, as a one-time connection to the VAS Cloud provides access to many available value-added services. At the same time, service providers can be activated with one integration on many connected terminals.
- Future-proof – also for SmartPOS and Android terminals