When talking about mobile payments it is common for industry experts to overlook the mobile point of purchase (mPOS) systems that have become an increasingly common payment tool in the retail and hospitality sectors. This is because, strictly speaking, such devices do not involve transactions that meet the definition of “mobile payments,” in which a consumer uses their mobile phone rather than cash or cards to make a payment.
At the same time, the already deep and rapid penetration of mPOS systems is tied in with the larger move to genuine mobile payments, and for some merchants the adoption of an mPOS system will take place simultaneously with the development and execution of a full-fledged mobile payment strategy.
So the first question is, what benefits do existing mPOS systems offer?
One is the ability to bring checkout to the customer in virtually any retail setting, rather than the now “traditional” mPOS use case involving seated restaurant patrons. This can allow merchants to “save the sale” when a customer faces a checkout line or a sale is otherwise guaranteed or enhanced by the option of speedy mobile checkout. It also allows retailers to “reclaim the store floor” and quickly reconfigure the layout of a retail location, to sell more and maximize sales per square foot or meter.
Another is the ability to bring checkout outside of the store. With certain mPOS systems merchants can accept payments at outside events, pop-up locations or, in the case of micro-merchants, tradespeople and other merchants without stores, to accept payments on the road.
Mobile POS systems can also offer opportunities for better reporting, inventory-taking and other improvements to a merchant’s operations.
But which kind of mPOS system is best?
This is a question that every merchant has to answer for themselves, based on their own specific needs, and their answers to questions like the following:
- How many transactions will likely be involved?
- How important is scalability, meaning the ability to add additional mPOS devices and grow transaction volume?
- How important is simplicity, both in terms of the technical systems and the financial arrangements offered by related financial institutions?
- How crucial are low investment costs? Can the mobile units be consumer devices such as an iPad Touch or a smartphone with a card-reading “dongle” connected via its headphone jack, or does the retailer need specialized card readers with encrypting PIN pads and printers?
- Does the mPOS system need to be integrated with an existing ERP system?
- Does the system need to perform other functions besides accepting payment, such as scanning and processing loyalty cards or discount coupons?
But don’t forget what’s coming next!
Finally – and perhaps most importantly – is the question of how the mPOS “present” takes account of the mobile payment future.
Because while mPOS systems are generally designed to make the acceptance of card payments mobile, the rapidly growing demand for genuine mobile payments will see virtual wallets on customer’s phones displacing not only cash and coins but physical cards – and thus displacing the “traditional” mPOS systems so many firms are implementing today.
In addition to convenience, m-payments have one other major advantage over all card-based systems: Security. Unlike systems that demand the swiping of a card, m-payment systems never leave a customer’s data exposed to theft.
All this helps to explain the increasing number of “micro-merchants” who are adopting pure m-payment systems like those offered as white label solutions by Cellum to selected institutions in Europe and beyond. So by all means implement mPOS. But don’t forget what’s coming next.