In an upcoming blog post Wednesday, PayPal CTO James Barrese said his company is creating two new extensions for Magento’s 150,000 merchants. The first, called In-Aisle Selling, hooks PayPal’s point-of-sale mobile payments service Here directly to a merchant’s store. Here lets a salesman to take a credit or debit card payment anywhere in the store with PayPal’s triangular magnetic reader, while Magento’s ordering and inventory system pulls down all purchase and customer details.

The second extension is called Order Ahead, which lets merchants set up shop in PayPal’s mobile app. In January, PayPal launched a pilot project with one of its key mobile payments customers, Jamba Juice. Customers could access Jamba Juice’s menu from the app, place an order while waiting in line or before they arrived — even make special substitution requests — and of course pay for their drink.

Barrese said the pilot was a success and now it’s expanding Order Ahead, starting with Magento merchants. Stores can use specialized templates to create their menus or catalogs and synchronize their opening hours and locations with PayPal’s ordering system. Merchants can then manage the pre-orders through a simple console available in the extension or directly integrate Order Ahead into their existing point-of-sale systems using Magento’s APIs. Customers can pick up their orders either by presenting their names, order numbers or the QR code on their e-receipts.

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It’s not different merely on the basis of functionality – although it communicates with the merchant’s iOS or Android device via Bluetooth, rather than by being plugged into it – but mainly because of the company behind it. Netherlands-based Adyen is already an entrenched online and mobile payments provider for multinationals such as KLM, Vodafone and Groupon.

European competitors such as iZettle and Payleven are going after small businesses and sole traders who would otherwise be unable to handle physical card payments. So is Adyen, but Shuttle is mostly aimed at bigger players.

And that means looking at the business from a different angle. Adyen, which already provides those familiar gray VeriFone point-of-sale devices, is pitching Shuttle as a way of bridging the online and real-world sales environments from a reporting perspective. For example, a customer may have used his or her card on the merchant’s website, giving the merchant useful background when the same card gets used in-store.

“Within our offering, it’s a true multichannel offering,” Adyen chief commercial officer Roelant Prins told me. “The companies that are looking to use this already use us for e-commerce. They already know the way we provide reporting, our back office and everything.”

Adyen is keen to push the cost-effectiveness of Shuttle as a POS tool – the device costs €99 ($129) and the service €10 a month, while traditional point-of-sale terminals cost many hundreds. But Prins also had an interesting point to make about the mobility aspect of the service:

“Look at the luxury merchant in Holland who is focused on getting rid of the till and taking a mobile approach. If you buy a €500 purse, you don’t want to queue up to make a payment.”

Adyen has apps and an API for Shuttle, and will also be white-labeling the EMV-compliant service for anyone who wants to resell it. This is partly a function of the fact that Adyen processes payments end-to-end – it does not have to rely on banking partners to do this.

So, what does this mean for the emerging mobile payments sector?

Square can breathe easy for now as, while Adyen operates globally, the Shuttle rollout is Europe-only – for now. But within Europe, things are about to get interesting.

Until now, it had looked like iZettle was shaping up to be the winner – the company has been scoring crucial partnerships with banks and telcos alike.

However, iZettle remains hampered by the fact that it cannot provide a full chip-and-PIN service for customers with Visa cards: a dispute with Visa led instead to a somewhat less-slick workaround. Shuttle is full chip-and-PIN for all cards, and Adyen’s existing customer base means it can hit the ground running.

This is a new market, and it may well prove to not be a matter of the winner taking all. But it’s just received a pretty big shakeup.

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A barista taking your coffee preference via an iPad isn’t new. But the simplicity of touch-screen based checkout systems could be a major revelation for grocery owners used to paying tens of thousands of dollars for point of sale (POS) systems and the required training for them. So far, just a small chain in Pittsburgh, Pa. called Marty’s Market has Revel’s iPads installed on all five checkout lanes. But the company is expecting many more stores to get on board because of its pricing and the familiarity of the iPad.

Revel’s iPad system for grocery stores costs $2,000 per software license — one for each grocery checkout lane — and a $100 service fee per month per license. In return, stores get Revel’s cloud-based grocery inventory and payment system. On top of that, a store can also order accessories — iPads, scanners, scales, coin dispensers, receipt printers, and more. The “iGrocery store” concept isn’t just referring to an iPad — Revel also sells an iPod touch that integrates with its system so employees can scan items when ordering new products.

Shoppers can pay with standard methods — cards, cash, coupons, EDT (food stamps) — but also with services from mobile payment startups Dwolla and LevelUp, which let users make a quick transaction via a smartphone. There’s also a “kiosk mode” that can turn the iPad registers into self-checkout stands.

Cracking the grocery business

There are a couple reasons Revel thinks its solution stands a chance of cracking the grocery business. First, grocery POS systems haven’t changed much in about 20 years, and NCR, the cash register behemoth, can charge multiple thousands of dollars for the systems and their upkeep, Revel points out. Second, those systems are often complicated and require weeks of training for new checkers, and third, Revel thinks the iPad’s ease of use makes it a natural cash register.

“If you try to [install] a point of sale system you’re talking like two weeks of employee training, but with iPad … you walk right up to it and, within a couple minutes you’re running orders,” co-founder and CTO Chris Ciabarra said in an interview Monday. “That’s a huge selling point when I go out and pitch companies.”

Grocery employees can come and go, and employers have to spend money and time to train new people each time they’re hired, he said.

Apple’s sold 85 million iPads to date, but it’s the 400 million iPad, iPhone and iPad touch sales combined that make it pretty hard to find potential U.S. grocery store employees that aren’t at least familiar with Apple’s touchscreen devices.

Moving up to grocery stores is a pretty big step for two-year-old Revel Systems because installing cash registers at a grocery store isn’t as similar as you might think to restaurants. The company had to seriously beef up its software’s capability.

“The load of groceries is a lot more, there are a lot more SKU numbers, some have over 10,000 SKUs, other systems [like restaurants] have like 300,” said Ciabarra. ”The database is a key thing” because it has to handle so many networks (EDT, coupons, etc.).

Getting into an entrenched market like the cash registers business is going to be tough. But Revel Systems isn’t starting from scratch. The cloud and mobile are going to continue to disrupt payment systems, and Revel already has its foot in the door. It needs to get a national chain to buy into its system, but that’s obviously easier said than done.

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Raco Wireless, T-Mobile’s machine-to-machine communications outsourcer, is working with an ice machine vendor to connect hundreds of thousands of these machines across the country, Raco President John Horn told me at the Connected World conference this week. He wouldn’t reveal the company, nor the timing. Horn would only say that the whole business of selling bagged ice in this country is about to significantly change.

Why on earth would you connect a bagged-ice machine? It’s the ideal use case for an M2M app, Horn said. The boxes can alert ice vendors when they start running low on inventory. They can send out a warning if the temperature of the machine rises above freezing or the refrigeration assembly appears to be malfunctioning, allowing the company to dispatch a repairman before the machine’s contents turn to slush. Horn said Raco is even working with the vendor to install remote payment terminals so customers can buy their ice on the spot and outside of business hours.

“It’s one simple new solution,” Horn said. “But with it your changing the entire user experience around buying a bag of ice.”

I’ve always enjoyed interviewing Horn, who headed up T-Mobile’s M2M business before he went to Raco, where he’s now basically handling the lion’s share of T-Mobile’s M2M business. Horn just loves to talk about all of the crazy uses toward which M2M technology is being put. In previous conversations we have discussed how wireless networks are linking farm equipment, greenhouses, children’s watches, and even cops.

In the last case, the police officers themselves aren’t chipped, rather key equipment they use. For instance M2M modules, coupled with accelerometers, can alert dispatch when the officer’s gun is unholstered or if when the officer is running and abruptly comes to a sudden stop – neither of which is ever a good good sign.

T-Mobile is trying to overcome the perception that that’s it M2M business is dying as it shuts down large portions of its 2G network, which hosts 90 percent of its M2M connections. Instead of losing business, T-Mobile and Raco have actually gained it, Horn said. In addition to its current ice machine project, Raco and T-Mobile just won a key deal with Apriva Wireless to power point-of-sale transactions in wireless payment terminals.

Photo courtesy of Shutterstock user Steve Heap

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At least part of that story is real, and Apple can make the second part real very soon if they use their $110 billion pile of cash to acquire the two companies that will help them get control of the local point-of-sale market, everywhere. Yes, I am suggesting that Apple acquire both Foursquare (let’s say, at a $1 billion to $2 billion valuation) and Square (currently evaluated at $4 billion, more or less). Paying a premium on both, Apple could keep it at $10 billion between them.

And what does Apple get?

A complete take over — and a true overhaul — of the local point-of-sale market. How much is it worth? Nobody can tell for sure. To give some examples, according to IBISWorld the grocery store market alone is worth an estimated $491 billion annually and convenience stores are a $51 billion market (a subscription is needed to view these reports). As Jason Calacanis wrote recently, if iPhones accounted for one percent of restaurant sales, that would be $6 billion of the $604 billion spent in 2011.

Apple-Foursquare-Square could jumpstart Apple on its way to take over a major part of the transactions in these (and many other) industries. Let’s look at what all three companies get out of this:

Apple gets:

* An immediate presence in the POS market, including merchant relationships. And it will get a platform for local payments that connects to the 200 million strong credit card database the company already has.

* The holy grail of advertising: conversion information. Apple will gain the ability to track customers from search and (even better) iAds to a point-of-sale purchase. We can only imagine how much that’s worth (read: a good chunk of Google’s business).

* Superior local search. Foursquare Explore continues to get better, and it is inherently social — ages ahead of any local search that exists today. Explore has been consistently improving, even outside of such major markets as New York City. If your friends are on (and if they have an iPhone, they will be if after this move), no other service can give you better personalized information about local businesses.

* A development team that is social to the core. Apple has long been accused of lacking “social DNA.” The Foursquare folks could be the seed of social at Apple — even beyond the location sharing — just like Flickr was the seed of social at Yahoo (well, maybe not).

Foursquare gets:

* More checkins and better information. Checkins should be implicit for every single purchase made, creating an immediate personal history. And if you haven’t checked in yet, then there should be an option to “explicitly” check in (i.e. broadcast to friends) when you make a purchase. More data means better recommendations, and it also makes additional services possible, not to mention better user modeling for marketing purposes.

* Easier integration for loyalty, business deals and coupons. Benefits could be factored right into the payment.

* Hundreds of millions of additional users from pre-installed iPhone clients. Additionally, other applications will be able to work with logins and data using device-level integration (similar to Twitter’s integration into iOS).

Square gets:

* 200 million pre-installed devices with credit card details already attached through customers’ Apple Store accounts, i.e. zero client acquisition cost.

* Hundreds of millions of devices equals a great motivation for merchants to sign up.

To summarize: after the deal, Apple will immediately become a giant payments company, with an installation base that is expected to encompass half of all mobile devices sold. The company will have the best local search abilities, far exceeding any existing recommendation engine. And due to its enormous reach, it will possess a payment system that merchants will line up to support. Who’s betting against this holy trinity? Not me.

Mor Naaman (@informor) is an assistant professor at Rutgers University where he directs the Social Media Information Lab. He is the co-founder and chief technology officer of Mahaya.  

Image courtesy of Flickr user miamism.

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Customers of a British restaurant chain with iPhones in their pockets and a registered PayPal account need never suffer the interminable wait again. Starting today, diners at all 370 Pizza Express restaurants will be able to use the chain’s iPhone app to pay for their meals at the table via PayPal in “less than a minute.” No wait-staff intervention needed.

Here’s how PayPal describes it:

Whip out your iPhone, tap in the code on the Pizza Express app, checkout with PayPal and walk out the door. Easy as that! You can even add a tip and redeem voucher codes. You don’t have to go to the counter or wait for the waiter to run your credit card.

As PayPal battles with competitors like Square for dominance in the mobile payment field, the company has been pushing its code  so developers can easily incorporate PayPal into their apps. While other food vendors are using the service, Pizza Express is the first restaurant chain to integrate PayPal Mobile into its platform and represents one of the largest PayPal integrations to date.

PayPal isn’t the only company going after the food service industry. Square is also aggressively courting restaurants with its new app-based payment system that lets customers pay from their mobile phones with credit cards, but not PayPal.

On the hardware side of the spectrum, startups like E La carte are teaming up with restaurants to offer tablets on tables that offer the ability to pay at the table as well as play games and order food.

With mobile payments still in its infancy, it will take a while before a winning platform can be crowned. But one thing is clear. Regardless of which platform wins the restaurant war, waiters of the future will likely have a lot more time on their hands. If they have jobs at all.

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Blacked out Apple Store in Durham, NC, before the iPad 2 launch

Earlier this week, BGR cited a “solid” source concerning a possible “major product launch” in conjunction with the 10th anniversary of Apple retail. Details focused on mysterious “hardware” that had already been received, overnight shifts this weekend, black helicopters curtains, and the always insanely tight security. Of course, the longtime Appleologist would be rightly be skeptical at the company launching a new product on a Monday, unless the new product was the Apple Store itself.

Like pieces in a puzzle, additional rumors are putting together a picture of a new retail experience to start the second decade of the Apple Store. 9to5 Mac has coined it the “Apple Store 2.0 event,” citing a source that provided “a load” of tantalizing unconfirmed information.

9to5 Mac asserts the new retail experience has been in planning for a while, led by CEO Steve Jobs and VP of Retail Ron Johnson. That makes sense, as the original Apple Store design was heavily influenced by those two. Supposedly, Apple industrial design wizard Jonathan Ive has also been involved with the planned changes.

Those changes reportedly include more emphasis on personal services relating to new products. Last quarter, Apple set up more than a million products for customers for free. Supposedly, a dedicated part of the store will be used for personal setup going forward.

In terms of the shopping experience, signage next to Apple products like Macs will be replaced with iPads, presumably to provide information displays. There will also be new, “huge” displays in some stores, as well as new sound systems. A few stores currently have wall-screen projectors. There will also be a new Apple Store app, if that’s not being too redundant, that will help guide consumers through a local shopping experience.

AppleInsider, citing sources “familiar” with Apple retail, suggests Apple is preparing to have employees use iPads on the floor. It’s unknown whether the iPads would replace the current EasyPay terminals used with the iPod touch, or perhaps be complementary. Those iPads could be the hardware BGR referenced.

It’s looking more and more like these rumors will pan out. That means besides a press release on Monday, expect some kind of carefully staged unveiling at a flagship store with at least some Apple executives present, if not Steve Jobs himself.

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Retail POS is a complex area ripe for disintermediation; traditional POS systems require retail stores, who aren’t generally comfortable or up-to-date with infrastructure and software maintenance, to have their own on-premise servers and maintain software. Using the cloud computing theme of abstracting IT management away from the end user, Vend is a new approach to POS systems. It’s one of the first examples of a persistent cloud app that runs directly on the front lines of business with hardware that’s little more than a standard PC with keyboard and mouse. As we wrote at the end of last year after the launch of Jack Dorsey’s Square product:

The marriage of computing and connectivity without the shackles of being tethered to a location is one of the biggest disruptive forces of modern times. It is (and will continue) to redefine business models, for decades.

Vend has interesting timing: The launch of more accessible mobile devices such as the iPad has provided a glimpse of what a medium-format mobile device can do for a work situation. Vend is a nice example of an application that provides a simple front end retail workers can use and hides the complexities in the cloud. From a technology perspective, Vend takes advantage of HTML5 to cache locally, so brief connectivity issues don’t affect the use of the system, and the application is hosted at Rackspace on their cloud service.  From a scaling perspective, this gives Vend the ability to roll out multiple servers to scale quite easily.

Fashion retailer Gregory/Ricochet is using Vend in 12 stores nationwide, opting to use it on iPads instead of traditional point-of-sale hardware. For a multi-outlet store like this, having inventory automatically coordinated across all branches — along with inventory data being updated in real-time — provides a benefit that traditional on-premise software can’t match. Not to mention the significant cost savings moving away from having their own infrastructure brings:

With Vend, we can retire a mountain of old equipment that was costing us thousands of dollars to maintain.

Continuing the “don’t make end users think” theme — Vend is integrated with third-party software and hardware — from accounting applications to barcode scanners and cash drawers, and is built in such a way that end users can mix and match software and hardware to meet their particular needs.

Vend is just one example of cloud smarts coming to retail, but as an emerging trend, it is an example of the disruption the cloud can bring.

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Ben Kepes is an independent consultant and contributing writer for GigaOM. Please see his disclosure statement in his bio.

Image Credit: AppleInsider.com

Finally, Apple is beginning the roll-out of its iPod touch-based payment and checkout system for retail stores. According to an exclusive report over at AppleInsider, the Mac maker will begin retiring its current Windows CE-based devices and implementing the new system within a couple of weeks.

The device is an entirely new iPod touch, custom designed for point-of-sale (POS) usage. It features a magnetic stripe reader, an advanced barcode scanner, and Apple’s own proprietary software for processing payments. The new system allows for payment by credit, debit and cash, and includes features that allow for making returns, too.

The EasyPay touch, as the device is being called, was made possible thanks to the introduction of hardware device support via the dock connector. The extended case that surrounds the basic iPod touch contains sleep and volume control buttons, a mini-USB connector for charging, and a rechargeable battery to power the card reader and barcode scanner.

Things that the EasyPay touch can’t do (yes, even it isn’t a miracle worker) include divvying up payment between two or more debit or credit cards, or paying by checks and processing cash returns. These transactions will continue to be handled by more traditional computer-based POS systems.

The roll-out of the new EasyPay touch system will include more than just a change in the hardware used for processing transactions. According to AppleInsider, Apple is aware that many customers find its non-traditional check out systems to be somewhat confusing, so attempts will be made to make it more clear when and where store guests can pay for their purchases.

While there are no plans currently to extend the payment system beyond the confines of Apple’s retail store, it’s impossible not to think about how such an elegant and simple system might appeal to other retailers as well. Should Apple ever decide to license the tech, I’m sure there will be at least a few major companies out there interested in pursuing such an agreement.

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