Plastic is so passé

As the retail landscape changes, payments hardware is scrambling

Three months ago, Apple Pay kicked off a new flurry of excitement about contactless payments. Now the retail industry is in a race to catch up, which is why in the last week we’ve seen a lot of new point-of-sale equipment debut, all geared to process these new types of transactions.

It’s not just that people want to pay for goods with their iPhones. They want to pay — and accept payment — from every manner device, whether its a Android phone or tablet a digital credit card or even a wearable gadget. Consequently that gray box with a numeric punch keypad and card swipe slot is giving way to a whole new generation of hardware.

[company]For instance, VeriFone[/company] has decided to make a kind universal point of sale system that will work with any kind of mobile device and mobile payments system.

e355 VeriFone PAYware terminal

Called the Mobile PAYware e355, the device has a built-in NFC reader and EMV chip reader, meaning it will accept contactless payments such as Apple Pay, Google Wallet or Softcard as well as new EMV smart chip cards, which will start replacing our old magnetic stripe cards this year. For good measure it also has a mag stripe reader so it can handle today’s credit cards as well as an optional barcode scanner that can read QR code-based payment systems like MCX CurrentC, a mobile wallet being promoted by big box retailers like Best Buy and Walmart.

The device attaches to a mobile phone or tablet either physically with USB or wirelessly with Bluetooth or Wi-Fi so it’s not locked down to, say, the iPad’s lightning dock, and VeriFone says it will be software upgradable in order to connect to any iOS, Android or even Windows device in the future. It’s a pretty smart move by VeriFone, which has traditionally built proprietary point of sale systems, but if retail commerce is moving to the mobile device – on both the consumer and retailer sides of the counter – than VeriFone has to move with it.

As retail commerce becomes more smartphone and tablet centric, we’re starting to see more mobile technology companies move into the retail space. I’m not just talking about Square and its numerous clones. Startups like Poynt and Clover (since acquired by First Data) are focusing their Silicon Valley’s design and programming skills on redesigning the cash register. And now mobile phone makers are getting in on the action as well.

[company]Samsung[/company] is taking a shot at payment terminals, announcing at the National Retail Federation Conference this week that it is partnering with VeriFone to make that company’s Android point-of-sale system with its Galaxy Tab Active slate at the center. [company]Panasonic[/company] is known for its ruggedized laptops and tablets, and now it’s making a version of its Toughpad for retailers. It boasts a few features you won’t find on your typical slate, such as a hardware PIN pad, EMV and mag stripe readers and a NFC radio.

Wirecard Smart Band

We’re even starting to see the reverse of this trend: financial companies innovating on hardware. This week, German payments and banking firm Wirecard announced a concept for a wristband that acts as a mobile wallet.

As I said earlier, [company]Apple[/company] Pay is driving a lot of this activity. Contactless payments are suddenly cool again, though Apple’s rising tide isn’t necessarily raising all ships. Google is seeing more activity on Wallet lately, but Softcard – the mobile carrier’s NFC payments platform – appears to be suffering. Last week it laid off 60 employees, which isn’t a good sign that business is booming.

What we’re seeing, though, is a big convergence of new technologies and policies in the normally staid retail payments market. Apple Pay is one thing, but the coming move away from standard magnetic credit cards in the U.S. to more secure EMV card transactions is necessitating a huge overhaul of current point-of-sale equipment in stores. Companies like Square are making credit card payments available to ever broader cross-section of businesses. And new concepts for universal payment devices like Coin, Plastc and LoopPay are getting a lot of attention.

The countertop hardware at stores is changing, as is the hardware — or plasticware — we’re using to make our purchases. We’re still going to see a lot of the familiar financial industry names when we make our purchases, but Silicon Valley and the mobile industry are rapidly injecting themselves into the retail commerce. Soon, we’ll be just as likely to see Samsung, Apple and Google at the checkout stand as we are VeriFone and Visa.

4 Responses to “As the retail landscape changes, payments hardware is scrambling”

  1. John Strom

    That may be all well and good but the ONLY smartphone payment system I’m aware of that is truly SECURE, does not transmit MY information to the merchant and is “hack proof” is Apple Pay. The rest are not.

    • GlenBarrington

      Is Apple Pay “hack proof”? Or is it that no one has yet figured out how to do it yet? My guess is on the latter, and we’ll see how “proof” it is in less than 18 months, two years, tops. The crooks aren’t about to let money laying on the table stay there without at least TRYING to take it!

      As to the competing services, the will figure out how to work around Apple’s patents and offer a similar level of security. Each will offer a slightly different take on that need, which will be a good thing overall.