SAN DIEGO — Payment terminal makers are planning a cloud-connected point of sale to allow the integration of social couponing and other new functions.
VeriFone Systems Inc. and Hypercom Corp. said here at the ETA Annual Meeting & Expo that the computing cloud, defined by many as the interconnectivity of multiple computer servers, would allow the conversion of payments, technology, media and mobility.
"It's a perfect storm of new technology that's coming in the next two or three years," said David Talach, VeriFone's vice president of global product marketing.
New approaches are moving payments from the end of the transaction to an earlier point in the exchange, Philippe Tartavull, Hypercom's president and chief executive, said in an interview.
For example, a consumer might pay for a discounted dinner online or from a smartphone and then go to the restaurant to eat the meal, Tartavull said.
Besides offering convenience to consumers, driving business into stores and providing independent sales organizations with products to sell, couponing and other new services move the terminal makers upstream to capture revenue, an analyst said.
Instead of simply providing terminals and gateways, both standardized products, the terminal companies are using their new connections with the cloud to set themselves up to receive recurring revenue, said Eric Grover, a principal at Intrepid Ventures, a payments consulting firm in Minden, Nev.
At the show, VeriFone, of San Jose, Calif., touted its Paymedia system, which the company said outperforms previous payments gateways, linking terminals to the computing cloud and incorporating mobility.
By doing so, the system readies the point of sale for discounts, rewards and couponing, Talach said.
The system, intended for small and midsize retailers, also updates terminals remotely and automatically shuts down compromised terminals, he said.
VeriFone's VX terminals, made since about 2005, will accept the software needed to connect with Paymedia, Talach said. So far, 12 ISOs have signed on to promote Paymedia, and three "media partners" are offering alternative payments over the system, he said.
"If the pace of technology slows, your product becomes commoditized," Talach said.
VeriFone is not using the system to become a payments processor but instead wants to make terminals more useful by connecting them to the cloud, Talach said.
VeriFone's vision for the future shares much with that of Hypercom, of Scottsdale, Ariz. (VeriFone expects to complete its deal for Hypercom's non-U.S. operations later this year; the French terminal maker Ingenico SA has agreed to buy Hypercom's U.S. payments systems business. Both deals are pending regulatory approvals.)
At the ETA show, Hypercom promoted its Intellinac network-access controller, said William Rossiter, Hypercom's vice president of marketing.
The product allows ISOs to offer loyalty programs even to the smallest merchants, Rossiter said. Rewards programs will show merchants the true results of the discount offerings now becoming widespread by demonstrating how many of the bargain hunters become repeat customers, he said.
ISOs may bundle loyalty and other functions supported by Intellinac with payments processing services to differentiate themselves from competitors, Rossiter said.
