The Store Register Is Going Mobile, Creating New Winners And Losers In The Payments Industry

GrouponGroupon's Breadcrumb mPOS

Mobile store registers are driving a rapid shift in how stores accept card payments and manage their businesses.

Also known as mobile point-of-sale or mPOS, these registers can be challenging to define, especially as so many companies have recently come to market with different innovations. We include a variety of different devices in our definition, including:

• Dongles, stands (see the Breadcrumb, right), and sleeves that are attached to existing smartphones and tablets.
• Purpose-built mobile devices, most often a tablet that has a custom-built operating system and software for facilitating POS functions and payment acceptance.

In a new report from BI Intelligence, we examine the effects of mPOS on the retail, hospitality, and food-services segments. These industries are the primary target market for mPOS companies. We cut through the mPOS hype by analyzing the needs of the retailers that have adopted the technology, and interviewing merchants to find what has worked and what hasn't.

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Here are some of the key trends and ramifications around the transition to mPOS:

• What distinguishes an mPOS solution from a legacy POS is that they are portable or semi-portable and/or use cloud-based software and apps. The mPOS registers often are powered by the same operating systems found on consumer devices. Legacy POS systems, on the other hand, run on closed software systems, and usually rely on purpose-built devices or PCs.
• Legacy POS operators and payment terminal companies are coming to market with their own mPOS solutions, and are beginning to blur the line between old versus new technologies and setting the stage for new industry market-share battles.
• mPOS are helping retailers move toward payment and business applications that can be customized and tweaked to meet specific merchant needs. The mPOS is increasingly open to third-party developers who create business-management and marketing apps hosted on the mPOS device.
• Hardware types have proliferated, and now mPOS take on a variety of shapes, from large base stations into which a tablet can be inserted, to sleek tablet-like devices. The market is no longer just about dongles that pair with smartphones and tablets.
• The mPOS is also part of the switch from analog to digital. Connectivity has moved on from the analog phone lines that once connected store registers to credit card networks. Connecting transaction data to the internet and cloud-based software gives retailers a better ability to easily get software updates, and gives them quick access to transaction information. Retailers increasingly expect to be able to quickly and easily access the best tools for managing inventory, handling payroll, and analyzing transaction data.

In full, the report:

• Explains why retail adoption of mPOS is lower than surveys suggest.
• Reveals why revenue-generation has been challenging for mPOS companies.
• Points to how the mPOS business model is shifting from processing to software-based value-added services.
• Lists some of the top mPOS vendors from both the legacy payments industry and the world of VC-backed startups.
• Forecasts mPOS adoption among US retailers from 2014 through 2019.
• Estimates addressable processing revenue for mPOS providers targeting small merchants.
• Analyzes why mPOS has caught on with small retailers and why some of these retailers are reverting back to legacy systems.

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BI Intelligence