NCR Offering a Cloud-Based Mobile-Payments Option

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In what amounts to its newest competitive punches in mobile payments, Duluth, Ga.-based terminal manufacturer NCR showcased cloud-based point-of-sale software for independent retailers Jan. 16 at the annual National Retailer Federation 2012 Big Show in New York. NCR plans to make the software, called NCR Silver, available within three months.

NCR Silver enables merchants to process credit cards on touch-screen point-of-sale terminals and Apple Inc.'s iPads, iPods and iPhones.

The company's intention to continue developing retail-oriented payments and marketing software became even clearer when it also announced Jan. 19 an agreement with London-based Marks and Spencer PLC to set up multimedia digital displays in the clothing retailer's stores. Prospective buyers use the Style Online touch-screen devices to read information about current fashion trends and view various garments and accessories specific to their body styles, according to an NCR press release.

The NCR announcements echoed those earlier this month from San Jose, Calif.-based terminal maker VeriFone Systems Inc.

VeriFone introduced retail mobile-payment software for testing at Guess Inc. clothing stores in the United States, allowing potential customers to compare clothing items and prices through a digital kiosk on wheels they could roll into a store dressing room.

The moves to provide mobile payment and marketing tools is a logical response for major point-of-sale terminal manufacturers watching smaller companies and startups introduce what seems like daily their own mobile-payment products, one industry analyst contends.

"The entry of some new companies like Square Inc. into the market with mobile-payment devices gave the incumbents like NCR and VeriFone a real wakeup call," says Gil Luria, analyst with Los Angeles-based Wedbush Securities.

The larger companies needed to respond with new products because they had the advantage of being able to offer mobile-payment software to current or prospective merchant clients as an "add-on" to other equipment and software offerings, Luria says.

"If a merchant buys from Square or another upstart, he has to consider what else is needed and how he is going to integrate everything," Luria suggests. "If you buy it from a larger payments equipment provider, it is easy to integrate."

The larger equipment manufacturers are buying mobile-payment technology from other companies or are developing their own, Luria adds.

Jack O'Malley, senior product manager, NCR Retail, believes the company's NCR Silver software-as-service gives smaller merchants an option from a company with vast experience in the retail payments industry.

Offered on a monthly subscription basis, NCR Silver software allows merchants to process payments and track sales, inventory and customer data to develop email marketing messages. Merchants using NCR Silver can accept card payments through a point-of-sale terminal or mobile device, or through both options simultaneously, O'Malley says.

A retailer choosing to deploy a touch-screen point-of-sale terminal with NCR Silver is offered the option of a preconfigured NCR terminal to avoid the challenge of adding different hardware to the system, O'Malley notes.

"Service providers such as in-home repair businesses could secure payment with the mobile devices immediately upon completing their appointment with the customer," O'Malley says.

Merchants who produce or sell products through in-home demonstrations or at community events, trade shows or other gatherings would be able to complete sales and track inventory from any location through NCR Silver on the Apple Inc. mobile devices, O'Malley adds. Merchants also may add an optional barcode scanner and magnetic stripe reader to the Apple devices.

In addition, NCR Silver provides advanced data encryption so card data are never exposed or stored in the merchant system or in NCR's data center, instead going directly to the issuing bank or processor, O'Malley says.

O'Malley would not disclose the cost of a monthly subscription to NCR Silver, saying only that the fees would depend on merchant size and needs.

Despite new products being introduced by major terminal and software companies, it does not spell pending gloom and doom for mobile-payment startups, Luria suggests.

"The smaller companies will always have niche applications that can be very helpful," Luria says. "It boils down to low-end acquiring because a smaller mobile-payment company allows a smaller merchant to accept credit cards without going through the whole process of getting terminals and setting up networks," he notes.

When a merchant's business grows larger, it is more likely that merchant would go through a traditional acquirer and purchase NCR, VeriFone, Ingenico or IBM terminals as part of the overall process, Luria adds.

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