Increasing Demand for mPOS Solutions
Today there is increasing excitement in the payments industry regarding a new card acceptance solution, providing a compelling combination of flexibility, portability and comprehensive security, all at lower cost than the traditional approach.
The features and functions of point-of-sale terminals used by merchants in ‘brick and mortar’ stores have evolved gradually over many years with magnetic stripe card acceptance remaining as the baseline. Many countries have already introduced enhancements to support EMV chip card technology and contactless transactions for fraud reduction and consumer convenience reasons respectively. One aspect that remains constant is the strict payment card industry security audit compliance that must be met before any terminal can be used to process card transactions – a highly controlled, complex and costly environment for the participants.
However, outside of the store environment, many merchants are still reliant on cash and do not accept cards at all. Today there is increasing excitement in the payments industry regarding a new card acceptance solution, providing a compelling combination of flexibility, portability and comprehensive security, all at lower cost than the traditional approach . Mobile point-of-sale (mPOS) is the preferred option of numerous micro merchants who are accepting card payments for the first time, opening up significant new opportunities for payment service providers (PSPs) to increase revenue through additional transaction volume. Significantly, existing card acceptance merchants are also adding mPOS to their payment options, mainly because it creates a better interaction experience with the consumer.
Both merchants and PSPs have operational and logistical issues with traditional POS terminals associated mainly with the highly controlled and certified environment in which they must be used. Some of the reasons that traditional POS terminals are either limiting or excluding card acceptance by a wide range of the merchant community include:
PSPs are responsible for ensuring merchant compliance of a very large and complex system with multiple components, many of which are supplied by the PSP – this results in high cost of entry, preventing tens of millions of micro-merchants globally from accepting cards.
Mobility and flexibility
Mobility and flexibility
Both merchants and PSPs have operational and logistical issues with traditional POS terminals associated mainly with the highly controlled and certified environment in which they must be used. Some of the reasons that traditional POS terminals are either limiting or excluding card acceptance by a wide range of the merchant community include:
PSPs are responsible for ensuring merchant compliance of a very large and complex system with multiple components, many of which are supplied by the PSP – this results in high cost of entry, preventing tens of millions of micro-merchants globally from accepting cards.
Overall Advantages of mPOS
mPOS is revolutionizing the consumer’s point-of sale experience. Micro merchants are now able to accept cards for the first time at any place, removing dependency on cash transactions while meeting customer expectations and avoiding lost sales opportunities where the customer wants to pay by card. Established ‘bricks and mortar’ merchants are now able to add new low cost and flexible card acceptance options to their in-store experience, helping to enrich the customer shopping experience.
mPOS helps PSPs to increase their revenue through expansion of the merchant base who accept cards for face-to-face transactions. The inherent need to secure the payment data is no longer constraining the solution or dominating the costs. Merchants get the POS interface they need, with the flexibility to enhance or change at will. The PSP obtains a secure, low cost, fast track method for on-boarding new merchants. The threat of a security breach threatening to destroy the organization is significantly reduced.
Hardware-based security underpins the whole mPOS ecosystem. Secure card readers encrypt the card data at the point of capture for both magnetic stripe and EMV chip cards. Hardware-based point-to-point encryption keeps micro merchants out of scope for PCI DSS and does not add to the PCI DSS burden for merchants already accepting cards using traditional POS terminals. HSMs improve security, simplify security audit compliance and limit liability for PSPs.