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Education

Just don't call it POS technology, even as many larger
retailers have converted to more

By Mike Camerling secure chip card acceptance systems.
AEVI Waiting for obsolescence
Older devices have been quite
he payment terminal has been the be-all, end-all of small merchant reliable. Many merchants keep them
POS transactions for many years. Many still use it as a single-pur- running until they break down, or
pose payment-acceptance device. But times are changing, and it's until payment industry requirements
T time to get out of the POS business and focus on the point of inter- for updated security and processing
action (POI), with payments being just one of multiple applications merchants standards make them obsolete,
can use to make their businesses more profitable and consumer friendly. unless somebody can sell them on a
replacement that truly adds tangible
Interaction at the merchant countertop today should encompass much more value and can be shown to make their
than payment. Consumers are far ahead of most small and midsize merchants businesses more profitable, more
in adoption of technology, using smartphones to access online ordering, social productive, and more in touch with
media, online reviews and recommendations, loyalty programs, and marketing customers' needs and expectations.
pitches.
Terminal vendors are prone to tout
Your typical merchant is likely using the smartphone in idle moments for technology advances when they
business apps, phone calls, messaging, social media, news and a host of refresh their product lines. But, really,
other functions. The payment terminal, however, often sits unused until the does the typical small merchant give
merchant has to ring up transactions, many of which are low value and eating a hoot about how much more RAM
into profits as various card processing fees compress already low margins. can be crammed in, or how much
MHz the latest ARM RISC processor
Is it any surprise that many smaller merchants still use terminals that are five, runs at? Not likely. Their primary
10 or even 15 years old? They simply don't see value in upgrading to newer concerns are probably how much is
it going to cost them, and what they
will get out of it.

You won't be able to sell these
merchants on a new system simply
because it can run one or two
applications beyond the core payment
functionality. There is no Wow! factor
in being able to accept EMV chip
transactions when every credit and
debit card still has a magnetic strip
that can easily be swiped.
Finding a compelling
business model
About the only winning argument to
upgrade to a more modern payment
terminal is to try and convince
them there are no upfront costs and
their monthly and per-transaction
costs will go down—not exactly a
compelling business model for any
ISO or merchant level salesperson.

The industry is shifting direction to
a model of feature-rich, payments-
integrated business apps and services.
Merchants need to interact with
customers in multiple ways such as
online ordering, loyalty management,

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