Given the numerous advantages of the cellular-enabled POS terminal, its remarkable growth in recent years is unsurprising. What is surprising then, is the notion that this type of device could already be set tomake way for alternative technologies. However, an increase in the use of consumer electronics as payment devices hasalreadyled some to suggest that thisis the way the market is heading.
With the growing ubiquity of smartphones, and to a lesser extent tablet PCs, a whole host of companies have begun to offer solutions that let consumers harness the portability of their personal devices and empower them to accept payments. Such companies include: Square,Apriva, CHARGE anywhere, wCharge and Adelante, amongst others.As long as they have access to a compatible payment processing service, merchants previously reliant solely on cash can offer their customers the ability to pay by card using their existingdevices (and thus avoiding the need to invest in additional,expensivepayment equipment).This could well beappealing to those who largelyconduct theirbusiness remotely - e.g.handymen, taxi drivers, gardeners,private tutors etc.
But will this technology impinge on the overall market for the traditional wireless POS terminal?
When conducting researchfor a new reportonthe integration of cellular connectivity in the payments industry, I spoke toa leadingvendor about this verysubject. Askedifsmartphone- and tablet-based solutions would eventuallycannibalise the POS terminal market, theparaphrased reply was succinct: “Yes, but only to a very small extent” and I’d have to agree. Off the top of my head, two reasons why there won’t be mass-adoption of payment-enabled consumer electronics immediately spring to mind:
- There is ageneral warinesswith inputting one's card details into a phone/tablet PC that will almost certainlypersist.
- Phones/tablet PCs are high-value consumerdevices.Should a thief decide they want one, the merchant isn’t losing a POS terminal per se; they are losing a multifunctional device.
Pros and cons aside, one thing is almost certain – growth in the total available market for mobile payments (be they smartphones, tablets or mobile POS terminals) will continue apace.