At the intersection of the rise in credit and debit card use by consumers and the increased technology in mobile devices like tablets and cell phones, mobile payments has been on the rise. However, looking to the other side of the counter, there has been another trend on the rise: The mobile point-of-sale (mPOS).
Merchants have long desired to find new ways to accommodate customers who prefer using cards to cash, and for small businesses, the mPOS has become the easiest way to bridge the gap.
A (very) Brief History of mPOS
The history of mPOS dates farther back than many would think. Sixteen years ago, the ‘golden age of the PDA’ gave rise to the first limited use of the mPOS, created by Infinite Peripherals. Although bulky and difficult to use, the first mPOS platform started the concept, which was expanded with the introduction of the iPod 3 and brought into mainstream popularity for single-unit businesses by Square.
Now, the market exists for two distinct groups, according to Infinite Peripherals founder Andy Graham.
“The mPOS ecosystem is now changing as it bifurcates between two user categories. For small merchants and retailers mPOS functions as a low cost card acceptance system. For larger already to scale players, on the other hand, the technology exists as another tool in their “customer-convenience” tool box.”
A Growing Network of mPOS Platforms
Looking forward, the mPOS market continues to become a battleground, broken into six categories by the monthly PYMNTS mPOS tracker® report:
- Merchant Consumer Network: Use mobile devices and other assets on both consumer and merchant side to create a network enabled by mobile devices and applications.
- Core: Basic hardware and card reader solutions
- Core + Front Office: Hardware and marketing/CRM/advertising solutions
- Core + Back Office: Hardware and accounting/back office solutions
- Core + Front and Back Office: Complete hardware, loyalty/marketing, and back office solutions
- Open Platform/API: Merchant-facing players serving merchants directly, but who also provide options to hardware and software developers via API.
For the full list of providers pursuant to August 2015, read the entire mPOS tracker from PYMNTS.
What’s Next for mPOS?
On the horizon for platforms, merchants, and consumers, a few trends stand out:
- Customer Engagement a Top Priority: Improving face-to-face engagement while being able to move customers through the cashwrap faster, mPOS hopes to improve labor productivity and provide ROI within two years, according to Retail Info Systems (RIS) News.
- Adoption among Retailers: Mobile POS only sits at 13 percent of retailers and will not likely replace fixed cash-wrap stations, as expected.
- A Need for EMV-Ready mPOS: With the move to chip-and-PIN/chip-and-signature in the US, an expected 38 million mPOS systems (by 2017) will need to accept both both chip cards and mobile payments like Apple Pay and Android Pay. Platforms like Square, Intuit, and PayPal have rolled out EMV-Ready mPOS readers, according to ZDNet.
- Apple’s Foreboding Presence: The enabler to mPOS use en masse among retailers, Apple is working harder to attract small business customers and convincing more retailers to accept Apple Pay. The very presence could have a vast impact on businesses, who could bundle different applications from POS to beacon technology.
With the continued drive to mobility, mPOS adoption could change how businesses interact with customers, causing a new way to think of customer service, supply chain, and payments.
See how mobility is reshaping the market in some of the latest WEX blogs:
- Samsung Pay and Android Pay Rise to Answer Apple Pay
- Enabling Mobile Payments for Closed loop Private Label Cards
- Contactless Payments: When There’s A Need for Speed
- What’s Next? Wearable Payments
- Barriers to use of Mobile Payments