Like many longtime makers of point-of-sale hardware, Ingenico has had to pivot hard toward digital payments. Its latest move involves partnerships with the buy now/pay later providers Splitit and Klarna, and the biometric firm Fujitsu Frontech.
The flurry of activity is part of an effort to compete in a market that includes merchant-facing fintechs like Block and Stripe, as well as other payments technology manufacturers.
"As shoppers emerge from the pandemic, they're going to want to go back to stores, but they're also going to want a new and better experience," said Michel Leger, executive vice president of global solution development at Ingenico, which in the past few weeks has added options for merchants to digitally offer buy now/pay later lending at physical checkout, as well as a way for consumers to pay without using any device at all.
By adding BNPL to its in-store hardware, Ingenico can offer a new market for lenders that have traditionally operated in e-commerce. The Splitit partnership adds BNPL capabilities through Ingenico's payments as a service platform. By embedding BNPL into Ingenico's platform, Splitit can potentially reach an expanding market for point-of-sale credit, which is on pace to reach 900 million consumers by 2027 from 360 million at the end of 2022, according to
The partnership additionally improves the in-store experience for BNPL, said Nanden Sheth, CEO of Splitit, who contends legacy in-store BNPL is cumbersome and time-consuming, with multiple steps to complete a purchase, which raises abandonment risk.
"That, coupled with the approval process with underwriting decisions needing to be made and the possibility of being rejected while in the store, is a challenge," Sheth said, adding that Splitit's version of BNPL, which utilizes unused credit card lines, can make the in-store BNPL experience similar to a traditional credit card payment.
Ingenico also signed a similar deal with the payments company and BNPL lender Klarna, bringing one more BNPL option to the point of sale. Both Splitit and Klarna can benefit from Ingenico's network of 1,100 merchant acquirers and more than 40 million point-of-sale terminals globally.
While the
"The core of our business is in payments but any added service is of value," Leger said. "Adding another way to finance a purchase at the point of sale is a good example."
Ingenico has been pushing beyond the static point of sale for years, often as its ownership structure shifted under its feet.
In another move to modernize its tech, Ingenico in late January teamed with Fujitsu Frontech North America to develop a biometric payment system that enables palm-vein identification. The technology executes payments when consumers move the palm of their hand over an infrared sensor on Ingenico point-of-sale devices, reducing the need for cards.
"There's a lot of cases where biometrics can cut a lot of time," Leger said. "Places like a music festival or an amusement park, or someone could forget their card."
By combining security, payments and point-of-sale credit options, Ingenico is attempting to position itself as a provider of a broad array of services in addition to payments processing.
It's a strategy that's catching on in other areas of the payments business, where companies that for years relied on payments fees are looking to turn their existing operations into distribution networks for new innovation.
Payments are increasingly integrated into merchant operations regardless of channel, essentially becoming a utility that enables their commerce activity, said Thad Peterson, a strategic advisor for Aite-Novarica.
"As payments become increasingly commoditized and transaction-pricing margins decrease, processors need to deliver additional services to generate incremental revenue and increase their value proposition to the merchant," Peterson said. "And for merchants, the ability to obtain additional payment-related services through a single connection or provider simplifies payment management."
The combination of the processor's need for incremental revenue and the merchant's need for additional services creates an opportunity — if not a requirement — for the delivery of value-added services, Peterson said.
