PCM4.1.!!

Payment terminals (r)evolution – changing the dynamics of card acquiring
by ERIC DE PUTTER
After years of declining sales, 2017 was the year that
John Lewis, one of the UK’s largest department stores
stopped selling SatNavs. Smartphones are becoming
more and more intelligent and avoid the need for other
hardware. Photo cameras were the first casualty,
followed by scanners, alarm clocks, voice recorder,
MP3 players and calculators.
The strategic vision in the payment industry is that
smartphones are the successor to cards. In addition
to this, research by the Aite group and Payment
Redesign demonstrates that also payment terminals
can be replaced by a
smartphone.
Card payments need
to stay relevant
to capture more
acceptance. P2P
solutions such as
Mobile (Denmark),
PayConiq (Belgium,
Netherlands) and
Ping-it (UK) allow
payments between
smartphones without
a need for additional
hardware. This
brings electronic
payments to a new
audience, where
card payment
does seem a bit
cumbersome as it
requires a payment
terminal.
After interviewing
a range of
stakeholders during
a research on how
the industry could change, the Aite group and Payment
Redesign identified the above timeline. Mobile POS
was the first technology to become mainstream, mainly
pushed by Fintechs offering technology and card
acquiring.
Most incumbent manufacturers, and some new entrants
such as Poynt and AEVI, offer Android based terminals
and the term Smart POS was born. Square has developed
a dongle style card reader with the PIN keyed in on the
smartphone. Canadian based Mobeewave is pitching a
smartphone for NFC and mobile payments. The latter
can be qualified as a genuine Soft POS, a software only
solution for a Point-Of-Sale that can take NFC cards and
NFC supporting mobile phones.
Security is the main concern smartphone security,
an activity that is addressed by the PCI DSS Forum.
The current security and certification framework
seems applicable to Smart POS terminals, dedicated
manufactured to take card payments but not to devices
such as mainstream manufactured smartphones.
The PCI DSS forum is currently specifying the security
framework and certification requirements and it is
envisaged that this will be delivered by year-end. This
work is also known as the PIN-on-glass specification
and once in place, this will open availability of prim
and proper certified
solutions.
Where mobile POS
was about gaining
typically smaller
retailers, SmartPOS is
about offering more
services varying from
checking if items are
on stock – and take
payment to offering
a client in a hotel to
call a Uber through a
payment app. Smart
POS devices will be
couple to an app
store with services
linked to card
payments.
SoftPOS will have a
bigger impact and
may potentially
disrupt the existing
card acquiring
sales and terminal
fulfilment processes.
Any mobile phone shop can start selling terminals
with card acquiring contracts, execute KYC and be
the first contact point for maintenance. This is a good
opportunity for telecom shops to become a Payment
Institution and compete with card acquirers either team
up with a card acquirer.
Large retail banks can pro-actively offer an app to
their clients as they have already completed KYC. In
countries with a digital or mobile ID, any card acquirer
can quickly win new clients.
The transition from hard- to software seems a win for
card payments but each incumbent needs to assess if
they can benefit or not from this technology transition.
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MPE SPECIAL