"The retail point of sale represents a point of convergence for smartphone-initiated payments, social networking and electronic couponing, but it won't happen if retailers are expected, on faith, to absorb the costs of making it work," says CEO Douglas G Bergeron.
POS terminal giant Verifone is to include near field communication technology in all its new point-of-sale hardware, the company has told NFC World.
The news represents a major step towards achieving widespread adoption of NFC mobile payments. Merchants upgrading their point-of-sale terminals with Verifone will now find that they automatically have the ability to process contactless and NFC payments, without needing to weigh up the pros and cons of whether or not to specify — and pay for — the technology.
Last week Verifone CEO Douglas G Bergeron hinted that NFC would become standard in its POS terminals, saying "merchant resistance" was the biggest obstacle to overcome in integrating the technology into the retail environment.
"Emerging mobile payments platforms represent a leap forward in electronic payment transactions, but those who want to claim leadership in this space have to reconcile merchant resistance to the imposition of costs to implement new infrastructure that will be managed in an increasingly complex environment," Bergeron said.
"The retail point of sale represents a point of convergence for smartphone-initiated payments, social networking and electronic couponing, but it won't happen if retailers are expected, on faith, to absorb the costs of making it work.
"This isn't just an issue of adding an NFC reader, it requires deep software richness at the point-of-sale to interact with the smartphone and manage a services-based model encompassing new applications and deployments without disrupting operation of existing card systems."
Bergeron outlined six key rules that industry participants need to adhere to in order to ensure success of mobile commerce:
- Deployment and management of complex NFC technologies will require significant ongoing services from the retailer's payment systems provider. Until retailers are assured of receiving real value from mobile commerce, service providers who stand to gain from either carrier fees, advertising revenue or transaction charges must be willing to bear the costs of this highly disruptive paradigm shift.
- Mobile commerce must add value to the consumer. Tapping a phone is a gimmick, no different from tapping a card or fob. In addition to providing the ability to pay for stuff by phone, service providers and retailers need to provide real additional value — such as coupons, loyalty rewards and discounts — for consumers to leave their wallets at home.
- Mobile commerce must be streamlined with existing POS services and managed well for the retailer. Retailers won't tolerate the need for multiple methods of acceptance to accommodate what will become a wide array of mobile commerce schemes. All ideas, regardless of where or who generates them, must converge at a unified point-of-sale.
- Mobile commerce must go from zero to 90 mph in five seconds. Consumers will not embrace mobile commerce without the confidence that it is being widely accepted. If it only works at a few select retailers, it dies a quick death. Ten percent acceptance is not sustainable
- Mobile commerce must be integrated with other forms of payment. Mobile commerce won't lead to the quick death of plastic cards and must work with existing payment systems that are certified by all major processors and installed in the vast majority of large and small retailers.
- Mobile commerce must be ironclad secure. Security, both real and perceived, is imperative to the adoption and sustainability of mobile commerce. Even minor setbacks in security could compromise consumer adoption and stop the movement in its tracks.
Verifone last month secured approval from shareholders in Hypercom for a US$485m merger with the rival POS terminal supplier, creating a business expected to generate $2bn per year across the US and Europe. On Tuesday, it reported net revenues for the first quarter of 2011 of $284m, up from $223m in the same quarter of 2010.
Bergeron said: "Verifone posted a remarkable first quarter with record revenue, accelerating growth rates, and expanding margins. Every region grew by a double digit percentage, and our transformational service initiatives made significant advances in the quarter. We are excited about our prospects for 2011 and beyond.
"We find ourselves at the epicenter of the mobile payments revolution and the key enabler of the integration of new payment methods with the world's existing payment infrastructure."