Tuesday, May 20, 2014
As reported in Forbes and other media outlets, Apple upgraded its EasyPay mPOS software for use on the iPhone 5s. In addition to the upgrade, Apple switched its sleeve manufacturer from Infinite Peripherals Inc. to VeriFone and was reportedly in the process of equipping its sales associates with the iPhone 5s. In U.S. Apple Stores, employees had been using the iPod touch with Infinite Peripherals' Linea Pro sleeve to accept electronic transactions.
VeriFone's PAYware Mobile e315 is designed specifically for the iPhone 5 series, as well as the iPod touch 5. The mPOS sleeve, also called a shell or sled, fits over Apple's devices and incorporates a PIN pad and 2D laser barcode scanner. It can process contactless NFC transactions, Europay/MasterCard/Visa (EMV) chip card transactions, and old-fashioned mag stripe payments.
Reports have focused on Apple's shift to VeriFone as a strategic move in advance of the October 2015 deadline imposed by Visa Inc. and MasterCard Worldwide for when U.S. retailers are expected to be EMV compatible or face fraud liability risks. But Todd Ablowitz, President of payments consultancy Double Diamond Group, views the new partnership as VeriFone's statement that it intends to be a major player in the mPOS realm.
"It's really a win," Ablowitz said. "I think it's all about the fact that it sends a message that VeriFone has kicked out one of the peripherals manufacturers who had made some inroads."
Infinite Peripherals had been Apple's mPOS vendor since 2009. In January 2014, Infinite inked a deal to provide integrated payment firm Mercury Payment Systems LLC with mPOS devices. Mercury is a hot commodity, so hot that mega acquirer Vantiv LLC disclosed on May 12 that it had agreed to purchase Mercury for $1.65 billion.
Other vendors have also made significant strides in the mPOS space. In April 2014, Ingenico SA-owned ROAM entered a partnership with EVO Payments International to offer mPOS solutions to EVO's U.S. merchant base of 300,000.
Meanwhile, Canada-based AnywhereCommerce teamed with Moneris Solutions Corp. in December 2013 to supply mPOS devices to Moneris' stable of 350,000 merchant locations across North America. Then Anywhere Commerce made a January 2014 pact with Microsoft Corp. to provide mPOS functionality to retailers who use Surface tablets.
Apple's choice of VeriFone changes the dynamic. "It's still an early marketplace," Ablowitz said. "But when the company that is the traditional leader in point of sale and suddenly they get Gen Two of the Apple store themselves, it certainly bodes well for VeriFone's market share in the sleeve market."
The market for mPOS is surging as merchants abandon traditional POS terminals for more flexible, integrated solutions. London-based ABI Research forecasted in mid May 2014 the number of mPOS devices in the marketplace is set to increase fivefold by 2019, with 51 million devices to be in circulation, representing 46 percent of the overall POS market.
"The mPOS market does present a substantial opportunity for not only the expansion of point of sale solutions by those vendors already active but also by new OTT [over-the-top] players who could come into the payments space using mPOS as an entrance point," said ABI Research Senior analyst Phil Sealy. "There will always be a need for traditional POS solutions driven by large, fixed-lane checkout applications, but equally there will be merchants looking at simpler cost-effective solutions with added value services."
The most obvious benefit of mPOS devices is in line-busting, as it allows store clerks to take payments anywhere within stores and speed up the transaction process. But an April 2014 white paper issued by Infinite Peripherals, Four Distinct Areas of ROI of Mobile POS at Retail, said mPOS devices can also help "combat showrooming, encourage add-on sales or order out-of-stock items, run customer loyalty programs, manage inventory and change prices."
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