retail payments report - sponsored by verifone

SPONSORED BY

The status of retail payments survey

Are payment solution and technology providers in alignment with Retail and Merchant preferences?

2013

19-21 NOVEMBER 2013Register on www.cartes.com

405360_Comexpo_AP_CartesParis_215x280.indd 1 11/04/13 09:03

THE STATUS OF RETAIL PAYMENTS SURVEY – SPONSORED BY

www.cartes.com | www.paymentscardsandmobile.com CARTES in association with Payments Cards and Mobile 3

Introduction by VeriFone ............................................................................................................................................4

1. Survey Objective.................................................................................................................................................................5

2. Background .............................................................................................................................................................................6

3. Challenges for Retailers and Merchants ........................................................................................................8

Industry View on new Technologies and Security ..........................................................................................8

Industry View on new Technologies and Consumers ...............................................................................10

Industry View on new Technologies and Retailers/Merchants ........................................................... 12

Industry View on the new mPOS Technology ................................................................................................ 15

4. Key findings of the survey .......................................................................................................................................18

Contents

Contacts

Published May 2013

Copyright © 2013 PaymentsCM LLP

All rights reserved. Reproduction by any method or unauthorised circulation is strictly prohibited, and is a violation of international copyright law.

Alex RolfeManaging Director

[email protected]

+44 (0) 1263 711800

www.paymentscardsandmobile.com

Tom ConlonVP, Marketing and Business Development,

VeriFone EMEA

[email protected]

www.verifone.com

@VeriFone_EMEA

19-21 NOVEMBER 2013Register on www.cartes.com

405360_Comexpo_AP_CartesParis_215x280.indd 1 11/04/13 09:03

CARTESCARTES, Secure Connexions Event, is the world’s leading event in secure solutions for payment,

identification and mobility. From its beginnings in Paris in 1985, CARTES has grown to become

the world’s number one event in the industry, presenting 450 exhibitors and 140 conferences

featuring international experts. The event is attended by 20,000 visitors from 137 countries who

come to discover the latest trends and innovations (mobile payment, NFC, biometrics, M2M...).

The next edition will be held from November 19 to 21, 2013 in Paris Nord Villepinte – France. The

major topic this year is “Building trust in mobile life” including a specific focus on Connected

Commerce. Indeed new payment technologies and services are developed by technology

providers (NFC, digital wallet etc.) for retailers and merchants, to offer value added services to

the customers. The latest technologies and services will be presented in a dedicated “Smart

shopping area” within the exhibition.

What types of services are currently proposed? What type of solutions and technologies are

used? What is the level of trust in the new payment terminal solutions? What are the challenges

for retailers and merchants in customer adoption? In order to give an insight on these questions,

CARTES has decided to conduct a survey within the industry in partnership with Payments Cards

& Mobile and to publicize the results before and during the event.

www.cartes.com

Payments Cards & MobilePayments Cards & Mobile is an established and award-winning hub for payments industry

intelligence. We work with recognised industry experts to provide impartial, up-to-date and

relevant information and analysis on every area of card and mobile payment.

Payments Cards & Mobile is the leading payments publication covering every aspect of the

international card, mobile and contactless payments business.

www.paymentscardsandmobile.com

Isabelle AlfanoEvents Director

[email protected]

+33 (0) 1 7677 1107

www.cartes.com

THE STATUS OF RETAIL PAYMENTS SURVEY

www.cartes.com | www.paymentscardsandmobile.com CARTES in association with Payments Cards and Mobile4

In an Industry first, Payments Cards and Mobile has teamed with veteran industry exhibition CARTES,

Secure Connexions Event, to give an industry overview of the status of retail payments.

In this survey we are aiming to see if the goals of Retailers and Merchants are aligned with the suppliers of technology and

services to both Consumers and Retailers/Merchants. With the proliferation of technology, multi-channels, and convergence

in some areas we are seeing retailers and merchants being forced into making investment choices.

Objective of this short survey: aim to derive feedback from different players of the industry regarding what is on offer by

suppliers and what is required by the merchant.

At VeriFone we believe that listening to our customers, understanding and addressing their needs is a

fundamental part of our business. We are, therefore, delighted to sponsor this survey in conjunction

with PCM and CARTES, which uniquely assesses how well payment technology and service providers

are aligned to retail and consumer requirements.

It demonstrates that, collectively, we are ready to embrace and exploit new ways to better align physical and online channels and

are willing to invest in new ways to drive efficiency and value. The survey also reinforces that payments is now increasingly seen as

a strategic tool to manage customer relationships, drive footfall and boost loyalty.

As we seek to examine the impact of technology such as mobile and NFC on our industry, market insight like this is vital to keep

us focused on the essentials. It helps us all recognise that, for many merchants, payments is still about getting the basics better -

continuing to make the POS faster, more convenient and efficient and e-commerce platforms more integrated, reliable and secure.

For vendors, this means that payment innovation will have to be backed by pragmatic delivery and justified by its ability to deliver

real value for shoppers and bottom line return.

Tom Conlon, VP, Marketing and Business Development, VeriFone EMEA

Introduction

SPONSORED BY


This survey aims to see if the goals of Retailers and Merchants are aligned with the suppliers of technology

and services to both Consumers and Retailers/Merchants. Especially in focus are new technologies like

contactless cards, NFC payments on cards or in wallets, QR-codes, related values added mobile services,

and the mobile-POS terminals (mPOS) launched for the emerging markets of small and mobile merchants.

With the proliferation of technology, multi-channels, and convergence in some areas the initiators of the study are seeing retailers

and merchants being forced into making investment choices. Objective of this short survey: aim to derive feedback from different

players of the industry regarding what is on offer by suppliers and what is required by the merchant.

Survey Questions

The queries of the short study sent to the respondents are grouped in this document into four parts:

l Industry view on new technologies and security

l Industry view on new technologies and consumers

l Industry view on new technologies and retailers/merchants

l Industry view on the new mPOS technology and market

Compared to the rating average of all respondents, differentiated views were given by industry sector e. g. by merchants/retailers

different from those of banks/card schemes, and Payment Technology Providers.

The Respondents of the Survey

The invitation to respond to the short survey was sent out in March/April 2013 to

selected key persons from the payment industry and to merchants/retailers. The

respondents replying to the survey are broken down as follows: Europe (73.3%),

the Americas (13.9%), and the APMEA region (12.8%).

By industry segment, the respondents can be categorised into four key segments:

Merchant/Retailers (12.6%), Banks/Card Schemes (17.9%), Payment Technology Providers (40.0%), or Consultants (29.5%).

The frequent participation of Payment Technology Providers and Consultants shows a high interest in getting feedback regarding

the alignment of new technologies offered with the demands of merchants/retailers. Thus, the average rating of merchants/retailers

is compared to those of banks/card schemes and payment technology providers in addition to the average rating of all respondents.

At this initial stage, at a high level only, the study found some interesting results. Obviously, the study did not drill down either into the

different retail sectors (e. g. convenience stores, supermarkets, mid-sized retailers, small mobile merchants), or into the banking sectors

(e. g. finance institutions, e-money institutions) nor did it dedicate time into the many different types of payment technology providers

(e. g. card manufacturers, processors, payment service providers, POS network services, POS terminal vendors).

The initiators of the study are aware of the fact that some of these answers and ratings could have been more detailed depending on

the different types of retailers or by including internet players and non-bank prepaid product issuers. However, for the purposes of this

study we chose to group the respondents into three main categories: Merchant/Retailer, Bank Card Scheme and Payments Technology

Provider, sometimes referred to in this documents as PT Provider.

Survey Objective

THE STATUS OF RETAIL PAYMENTS SURVEY – SPONSORED BY

BanksCard SchemeConsultantMerchant/RetailerPayment Technology Provider

13.7%

29.5%

4.2%

12.6%

40%



The Traditional View of Retailers and Merchants on Payments

For some time retailers view on new means of payments have been clear and shall fulfil these demands:

One of the current key questions in the payment industry is to find out what the retailers view on payments is, how it affects their

priorities, willingness to invest and time-to-market regarding acceptance of new mobile technologies and mobile services in general.

Background – New Technologies offered – Status and Outlook

For many years, retail payments are practiced between consumers and merchants/retailers and include contact-based cards at POS

terminals and the e-payment mix on the internet (e. g. cards, wallets, online bank transfers, prepaid products and others).

On the other hand, both the whole payment industry and the retailers have noticed that consumers are going mobile, not just

by using smart phones and tablets for online shopping but also for a magnitude of other services like price comparison, coupon

download, store locator and even in-store services such as stock checking and detailed product information. Thus, retailers and

merchants are being forced to move into mobile services and multi-channel sales processes.

New IT technologies like mobile internet, tablet PCs, smart phones and contactless RFID/NFC/QR communication have led the way

to both mobile services and contactless services at the point of sale.

From 2008, various new technologies have been offered by Payment Technology Providers. Thanks to many successful

contactless/NFC pilots, the new technologies have proven their market readiness:

l Contactless cards e. g. card payments at any contactless POS terminal or contactless reader device

l Remote m-payments e. g. mobile payments by using smart phones on the internet

(on cards, online bank transfers, on prepaid products, on e-wallets)

l Mobile NFC Payments e. g. payments on cards at the point of sale (card brand transparent)

l Mobile NFC wallets e. g. payments on wallets both remote on the internet and NFC at the POS

l 2DQR-codes, 1D Barcodes e. g. bridging technology to online shops or to initiate cashless payments

In 2013 – Contactless cards are in a rollout process and consumers purchase online and pay cashlessly by using their PCs, smart phones

or tablets. Also, QR-codes are used enabling smart phones and tablets to connect from the real world to online shops on the internet.

Mobile consumers can use many mobile retail apps and experience more and more mobile services which demand mobile payments.

In parallel, new mobile-POS Chip and PIN card readers (mPOS terminals) can be combined with cloud-based electronic cash solutions

on tablets or on smart phones. Such solutions have become a valid new low cost option for small and mobile merchants.

Finally, mobile NFC Payments by using NFC capable smart phones have been successfully piloted. Recently, the card schemes,

together with banks and many mobile network operators, announced various mobile wallet services and are going to start to

compete with internet players like PayPal and Google.

Background

l Be secure – no fraud risks, payment guarantee for the merchant

l Be as fast as possible – no queuing at the register in the outlet

l Show high consumer acceptance

l Have low cost for merchants

l No investment where possible and/or protect investments made

by the merchant


Outlook – Retail payments are likely to migrate in the long-term from contact-based to contactless/NFC and

a new mPOS market segment is emerging. NFC payments on cards transparent or on wallets are the next

battlefield of the industry with internet players and banks competing at the contactless POS.

The final challenge for all payment industry players is then simply to find both consumer acceptance and merchant acceptance

and it is here that we find the industry at large is not in agreement.

In a recent announcement from Visa Europe they made public some very interesting growth stats for contactless:

However, in a separate study which appeared at the same time, in which UK residents answered questions about their payment and banking

habits, found that less than one in 10 people had actually made a purchase using their contactless card in the previous month.

These results were compared with a recent survey of industry professionals conducted by Compass Plus, to highlight the differences between

industry expectations and reality. The industry survey indicated that professionals believe the mass adoption of NFC and contactless payments

will take place between one and three years, however nearly 40% of the public revealed they did not even know what contactless payments are.

The same survey also revealed, that the major issue faced by payments professionals at the moment is the “Proliferation of new

payment channels” and this is really what we are trying to highlight in this study. If, as payments professionals we are struggling

with the influx of new methods and channels, how can expect Merchants, retailers and consumers to cope?

THE STATUS OF RETAIL PAYMENTS – SPONSORED BY

UK l 26.9 million cards in circulationl More than £39million worth of

contactless transactions in the month of March

l 232,000 terminals

Francel 6.7 million contactless cards l 16 million cards in the market by the

end of 2013l 120,000 contactless terminals

Poland l 57 million spend on contactless cards

and phones per monthl 10 million contactless transactions

every monthl 8.6 million contactless cards now in

circulation and 116,000 terminals

Slovakial One million contactless transactions in

March 2013l More than 1.3 million contactless cardsl More than 10,000 contactless terminals

Spainl 0.9 million contactless transactions in

March 2013l 2.9 million cards in the market and

183,000 contactless terminalsl 7.5 million cards by the end of 2013

Turkey l More than 6 million contactless cardsl 8.5 million cards in the market by the

end of 2013l 69,000 contactless terminals

The growth of NFC/contactless technologyThe proliferation of new payment channelsThe need for simple and convenient user authenticationThe rise of non-traditional payment providersNew business models via SaaS and Open Source App development

21%

18%30%

17%

14%

It’s already here1-2 years2-3 years3-4 years4+ years

10%

35%

6%

32%

17%

When do you expect to see the mass adoption of NFC/contactless in your region?

What is the biggest issue for the payment and card industry now?



With the proliferation of technology, multi-channels and convergence in some areas, retailers and

merchants are facing new challenges and are being forced into making investment choices, for

example, convergence to multi-channel sales and digital 1:1 client communication in order to retain

and win mobile consumers.

Selected current key questions for retailers and merchants regarding time to market are:

l Offer online shops on the mobile internet for mobile consumers (in rollout)

l Offer QR-code-based services and value added mobile services to mobile consumers (rollout just started)

l Be aware of future multi-channel selling (i.e. POS + internet + mobile app)

l Invest in contactless/NFC terminals to accept contactless cards and mobile NFC payments at the POS

l Invest in barcode scanners to accept and offer value added services (e. g. e-/m-couponing)

l Can tablets/smart phones with mPOS terminals disrupt investments into traditional ECR devices and POS terminals?

Market example: German retailers say that they have accelerated preparing for contactless and mobile payments systems by

investing into innovative electronic cash register solutions but giving higher priority to data security at the same time. Being aware

that smart phones are more frequently used by consumers, more than 70% of the large German retailers say they plan to invest in

NFC payments and QR-code scanners in order to be technically capable of accepting contactless and mobile payments at the POS

and in mobile shops on the internet.

Industry View on new Technologies and Security

Challenges for Retailers and Merchants

0 1

2 3

4 5

6 7

8

Mobile NFC

QR Codes

Contactless Debit/Credit/Prepaid cards

Remote m-payments

Mobile NFC wallets

Current contact-based Debit/Credit/Prepaid cards

New Internet Player Entrants e.g. PayPal, Google etc.

Online Bank Transfers on the internet and at the POS

Payment Technology Providers

Banks and Schemes

Retailers

Average

Source: PCM Research

Q2: What types of solutions and technology regarding payments are best for consumers?


Predominance of Solutions and Technologies in the next 3 – 5 years?

A key question of interest is what solutions and technologies will be predominant in the next 3 – 5 years:

Key Findingsl Regarding predominance, the views of the respondents by sector look rather aligned.

l According to rating average – Predominant are still contact-based card (!) and, also, contactless cards.

l QR-codes were ranked as least important when seen from the aspect of initiating payments.

l Mobile NFC technology and remote mobile payments were ranked less predominant.

l Contentious issue between retailers and banks/card schemes is the view on new internet player entrants.

New Technologies and related Security Issues

There is a general perception in the payments industry regarding security and fraud. Whilst many acknowledge that a 100% secure

solution is typically too difficult to get consumers to use. Thus, the respondents were asked which of the new technologies they

think is most secure regarding payments.

Key Findings

l Traditional cards were rated as most secure by most respondents and, also, by industry sectors.

l QR-codes were ranked as least secure when seen from the aspect of initiating payments.

l Also, magnetic stripes at mPOS terminals were ranked least secure – increased demand for Chip & PIN mPOS devices

l Indirectly, most respondents feel that proving day-to-day security of the new technologies is at an early stage.


0 1

2 3

4 5

6 7

Mobile NFC

QR Codes

Contactless Cards

Remote m-payments

Mobile NFC wallets

Magnetic Stripe at the MPOS Terminal

Traditional Cards


Banks and Schemes

Retailers

Average


Q10: Security issues: Which of the following technologies do you think is most secure?

Ranked from most secure as 1 and least secure as 7. There is a general perception in the payments industry regarding security and fraud. Many acknowledge that a 100% secure solution is too difficult to get consumers to use.



Industry View on new Technologies and Consumers

Solutions and Technologies best for Consumers

In order to get the highest level of consumer acceptance, an important question from the industry point of view is what types of

solutions and technologies regarding payments are best for consumers.

Key Findings – Rating Average

l The rating average of the respondents ranked cards top which is no real surprise.

l Contactless Cards are voted as best solution and technology for the consumer.

l Mobile NFC payments on cards – similar to contactless cards are voted second best.

l Thanks to best practise so far, traditional contact-based cards are still seen as third best for consumers (!).

l All respondents, including retailers/merchants, stated QR-code initiated payments are no good for consumers.

Key Findings – Rating by industry sectors

l The rating averages of retailers, banks+schemes, and PT Providers are – generally speaking – rather aligned.

l Retailers/merchants ranked traditional cards and then contactless cards as top demonstrating at the same time that NFC and NFC

wallet are rather new technologies which still show a lack of consumer demand.

l Banks/Schemes rated contactless cards and NFC payments on cards highest and expressed a “disliking” of contact-based cards and

e-/m-payments on the internet (risk, internet players).

l Especially the retailers stated QR-code initiated payments are no good for consumers.


0 1

2 3

4 5

6

Mobile NFC e. g. proximity card payments at the point of sale

QR codes e. g. bridging to online shops and/or initiating payments

Contactless cards e. g. card payments at any contactless reader device

Remote m-payments e. g. remote payments on the internet

Mobile NFC wallets e. g. remote on the internet and NFC at the POS

Traditional cards e. g. payments with contact-based cards


Banks and Schemes

Retailers

Average


Q1: What types of solutions and technology regarding payments are best for consumers?Ranked from 1 as the top to 6 as the lowest


Expectations of value added Mobile and Payment Services for Consumers

Following the accelerated growth of mobile services by number and value, another key question from the industry is what are the

expectations of new value added mobile and payment services for consumers?

Key Findings – Rating Average

l The rating average of the 3 choices is: secure payments, discounts and faster transactions - then: no higher cost.

l Not in focus: Greater product/service awareness, better access to bank accounts and location-based services.

l The rating by individual industry sector is more or less aligned with the rating average of all respondents.

l Contentious issue between retailers and banks/card schemes is the use of online payment services of non-banks at the POS.

While retailers/merchants would/are supporting this, the banks/schemes are not to be in favour of potential competitors.


0% 10%

20% 30%

40% 50%

60% 70%

Faster transactions at the POS

Greater awareness of the individual merchants’ products and services

Better access to personal nance and accounts

Discounts via loyalty and couponing

More location-based product & service information/o ering

Secure payments – no fraud risks

No higher cost when using new value added payment services

More exibility to choose the preferred payment service

Capability to use online payment services at the POS


Banks and Schemes

Retailers

Average


Q9: What is the expectation of new value added and payment services for consumers?Repondents chose up to three choices from the list. Thus, total of choices amounts to 300%



Industry View on new Technologies and Retailers/Merchants

Solutions and Technologies best for Merchants

In order to get the highest level of merchant acceptance, an important question from the industry point of view is what types of

solutions and technologies regarding payments are best for merchants.

Key Findings

l The rating average of the 3 choices is: contactless cards, contact-based cards and Mobile NFC on cards and on wallets.

l Contactless Cards are voted as the best solution and technology for the merchants.

l Least best for merchants according to the rating average: QR-codes, online bank transfers.

l Not good for merchants according to retailers own rating: QR-codes and remote m-payments.

l Best for merchants according to retailers own rating: contactless cards and Mobile NFC on cards/wallets.

l Best for merchants according to payment technology providers: contactless cards and Mobile NFC Wallets.


0% 10%

20% 30%

40% 50%

60% 70%

80%

Mobile NFC

QR Codes

Contactless cards

Remote m-payments

Mobile NFC wallets

Contact-based cards

New Internet Players

Online Bank Transfers


Banks and Schemes

Retailers

Average


Q5: What types of solutions and technology are best for merchants?Repondents chose up to three choices from the list. Thus, total of choices amounts to 300%, Others include biometry, new/low cost means of payments, retailer-branded apps


Value added Mobile and Payment Services for Merchants

Being aware of more and more mobile consumers, the question from the industry point of view is what do merchants want from

value added mobile services in addition to card payments and online payments?

Key Findings

l Knowing that new technologies have to meet the existing business requirements of the merchants, the rating Average by industry

sector looks aligned showing that all of the five issues are of importance to merchants.

l Rated most important were loyalty cards, couponing and consumer preference data.

l Rated least important: product tagging for greater consumer choice (which the retailers do by QR-coding anyhow).


0 1

2

3

4

Coupon download and redemption at POS

Loyalty cards

Geo-location for push messaging and local o ers

Consumer preference data for targeted daily/monthly deals

Product tagging for greater consumer choice


Banks and Schemes

Retailers

Average


Q3: Value added services for merchants - What do merchants want from value added mobile services in addition to card payments and online payment?Ranked in order of most important as 1 and least important as 5



Expectations of value added Mobile and Payment Services for Merchants’ Services

Another question from the industry point of view is what are the expectations of new value added mobile and payment services for

merchants’ services in addition to card payments and online payments?

Key Findings

l Rating Average by industry sector looks aligned: most important are driving new sales and attracting new customers.

l Rated least important was: winning new customer segments by offering cool services; no others were named.

l The impact of new ‘cool mobile services’ demanded by the young mobile generation on winning new client segments seems to

not yet be transparent to both the retailers and the payment industry.


0 1

2 3

4 5

6 7

Driving new sales

Attracting customer loyalty

Speeding up payment at the till

Greater consumer awareness of merchants products and services

Greater customer sales activity through targeted promotions

Winning new customer segments by o ering 'cool services'

Other


Banks and Schemes

Retailers

Average


Q4: What is the expectation of new value added mobile services for merchants’ services in addition to card payments and online payments? Ranked in order of most important as 1 and least important as 7


Industry View on the new mPOS Technology

From 2011, new mobile-POS Chip and PIN card readers (mPOS terminals) can be combined with cloud-based electronic cash solutions

on tablets or on smart phones. Such types of new electronic cash register solutions with mobile or cloud-based payment apps have

become valid low cost options for small/mobile merchants.

Level of Trust of Merchants in new mPOS solutions

In order to understand the level of merchant acceptance, an important question from the industry point of view is what level of trust

do merchants have in the new mPOS solutions?

Key Findings

l The rating average is dominated by ‘some trust’ – typical for very new emerging technologies

l Retailers showed high reluctance as they have no experience with mPOS terminals in their outlets so far.

l Already having some expertise with mPOS devices from pilots, banks and card schemes rated the relatively highest concerns

due to the fact that Square and clones originally started with magnetic stripe mPOS devices not supporting the European Chip

and PIN standards.

l It is noted that none of the very small and mobile merchants targeted for mPOS were respondents to the survey.


No Trust

Some Trust

Great Trust

0% 10%

20% 30%

40% 50%

60% 70%

80% 90%

100%


Banks and Schemes

Retailers

Average


Q6: What level of trust do merchants have in new mPOS solutions?

mPOS is a tablet/smart phone ECR+mini-POS device combined with chip & PIN card reader device



Level of Trust of Consumers in new mPOS solutions

In order to understand the level of consumer acceptance, another question from the industry point of view is what level of trust

do consumers have in the new mPOS solutions when paying on cards at small/mobile merchants’ tablets or mobile smart phones?

Key Findings

l Again, the rating average is dominated by ‘some trust’ – typical for very new emerging technologies.

l Retailers showed high reluctance as they do know that educating consumers is always a challenge.

l Thanks to having some expertise with mPOS device from pilots, banks and card schemes also rated the relatively highest concerns

due to the fact that Square and clones originally started with magnetic stripe mPOS devices not supporting the European Chip

and PIN standards which made mobile consumers somehow confused in the pilots.

l It is noted that none of the very small and mobile merchants targeted for mPOS were respondents to the survey.


0.0% 10.0%

20.0% 30.0%

40.0% 50.0%

60.0% 70.0%

80.0%

No Trust

Some Trust

Great Trust


Banks and Schemes

Retailers

Average


Q7: What level of trust do consumers have in new mPOS solution?mPOS is a tablet/smart phone ECR+mini-POS device combined with chip & PIN card reader device


mPOS solutions and potential disruption of the current POS market

One of the most important questions from both the industry and the retailer points of view is to what extent do new mPOS solutions

disrupt the current POS market.

Key Findings

l The new mPOS technology was rated by all industry sectors to have significant impact on the POS market.

l But, for the time being, the respondents have different views on the impact of the new mPOS technology.

l While retailers and payment technology providers rated it fairly disruptive highest, the banks and card schemes are already aware

that the impact of new mPOS technology might be very disruptive.

l A third of the respondents stated that the disrupting of the current POS market is expected only in the selected market segments

of small merchants and mobile merchants which are a kind of green field market segment for the whole payment industry.

One individual comment was given that many small merchants which have just one ECR application on a PC device and one

‘traditional’ EFTPOS terminal have the choice to migrate to cloud-based mPOS solutions.

Another individual comment was given that, so far, many of the very small and mobile merchants have never used an ECR device

and/or an EFTPOS terminal. Thus, the new mPOS technology enables a new emerging market segment for the payment industry.


0% 5% 10% 15%

20% 25%

30% 35%

40% 45%

50%

Not at all

Fairly Disruptive

Very Disruptive

Only in selected merchant segments


Banks and Schemes

Retailers

Average


Q8: To what extent do you envisage new mPOS solutions disrupting the current POS market?

mPOS is a tablet/smart phone ECR+mini-POS device combined with chip & PIN card reader device



The survey aimed to see if the goals of Retailers and Merchants are aligned with the suppliers

of technology and services to both Consumers and Retailers/Merchants. The industry players

responding to the study gave their individual view on the technologies like contactless cards, NFC

payments on cards or on wallets, QR-codes, related value added mobile services and the mobile-POS

terminals (mPOS) launched for the emerging market of small and mobile merchants.

The initiators of the study thank all the respondents for their detailed contribution to the results and for their individual feedback

regarding new technologies and what is required by the merchant, especially for giving different views by industry sector.

The individual rating average by queries provided by retailers, banks and card schemes and payment technology providers has been

– generally speaking – rather aligned. And all respondents had in mind that – beyond new technologies – the underlying challenge

for the industry is like always to win both consumer acceptance and merchant acceptance.

But independent from the technologies, the rating average by sector was sometimes specific for obvious sector specific reason. As

known in the industry, the view of merchants/retailers on payments follows different strategy and business objectives compared

to those of banks/card schemes and payment technology providers.

Summary – Industry view on new technologies and security

l Predominant in 3-5 years: contact-based cards and contactless cards; QR-codes were ranked as least important

l Contentious issue between retailers and banks/card schemes is the use of online payment services of non-banks at the POS.

While retailers/merchants would support, the banks/schemes are not to be in favour of potential competitors.

l Especially, the retailers ranked QR-code initiated payments being not best for consumers.

l Security – rated by all sectors most secure were traditional cards; least secure: QR-codes, magnetic stripe mPOS

Summary – Industry view on new technologies and consumers

l Best for consumers: Contactless cards and NFC payments on cards

l Mobile value added service expectations for consumers: secure payments, discounts and coupons and faster transactions.

Summary – Industry view on new technologies and merchants

l Best for merchants: contactless cards, contact-based cards and Mobile NFC on cards and on wallets.

l Mobile value added service expectations for merchants: loyalty cards, couponing and consumer preference data.

l Expectations most important for merchant services: driving new sales and attracting new customers.

l The impact of new ‘cool mobile services’ demanded by the young mobile generation on winning new client segments seems to

be not yet transparent to both the retailers and the payment industry.

Key findings of the survey


Summary – Industry view on the new mPOS technology and market

l Level of trust of merchants in mPOS solutions: some trust – typical for very new emerging technologies

l Level of trust of consumers in mPOS solutions: some trust – typical for very new emerging technologies

l The new mPOS technology was rated by all industry sectors to have significant impact on the POS market.


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