Clunky desktop point-of-sale terminals are becoming as outdated as shoebox-sized 1980s cell phones.
At least some ISOs and merchants see it that way. They prefer to process cards on handy, wireless mobile devices.
But such willingness to dive into mobile commerce is not the case for everyone, especially as new developments shake up the category almost weekly.
Instead, ISOs and merchants fall into one of two camps as they learn to adapt to mobile. Some cannot seem to deploy mobile commerce fast enough, while others are taking a wait-and-see approach.
Mobile commerce is highly publicized, but ISOs and agents still are trying to sort it out, says Jeff Zimmerman, vice president of product management for Clearent LLC, a St. Louis-based processor.
“What we’re seeing in the space is there’s not nearly enough sales in mobile as there is media coverage of it,” Zimmerman says. “Many of our ISOs need to make sense of what’s out there and how to sell it to merchants.”
Steve Gent holds a different perspective. For Gent, vice president of business development for Vision Payment Solutions, an ISO based in Portland, Maine, the uptick in his mobile clients has been sudden, and difficult to ignore.
Gent says about a half-dozen merchants have approached Vision Payments recently about setting up tablet point-of-sale systems in their stores.
“The mindset of not having to go to a register is kind of the hard charge in the payments industry from a mobile perspective,” says Gent.
The recent push toward tablets marks the latest in three paradigm shifts Gent has observed in mobile payments.
First came with the ability to take credit card processing abilities to the customer by using a smart phone with a virtual terminal, allowing merchants to key in card information on a phone with a browser. Second, companies began creating hardware to plug into smart phones, as with the mass-market use of a device from Square Inc.
But the third shift has come only in the past few months, with brick-and-mortar retailers investing in tablets instead of PCs to power their POS systems.
“From an ISO standpoint, I can’t imagine not knowing about mobile. It is just readily apparent that consumers are going that way, and it would be oversight not to follow the consumer and the technology available for exponential growth,” Gent says.
But with mobile-commerce products and strategies flooding the market, it remains uncertain which one will gain a foothold. That leaves some ISOs waiting it out, industry sources say.
“There are so many different [products and services] out there right now,” Zimmerman says. “I think it’s challenging for the ISOs and the merchants to figure out which one’s going to take.”
Few ISOs are pushing mobile; rather, merchants are more likely to inquire about whether they need it and how they can use it, he says. For instance, if an ISO comes across a university that wants to sell concessions for games, the university might ask for wireless processing and then inquire about using mobile.
Near Field Communication and mobile wallets are not getting much traction, either, says says Henry Helgeson, co-CEO of Merchant Warehouse, a Boston-based ISO. Fewer than 5% of Merchant Warehouse’s ISOs offer those capabilities, he says.
“The landscape isn’t really well-defined right now. And there are not a lot of phones that are NFC capable in the field,” Helgeson says. “A lot of ISOs are just sitting back and watching how all this develops.”
Taking the wait-and-see strategy might not be the best approach, though, Helgeson says.“I don’t think it’s a question of if NFC is coming, but when, he says.
At the same time, ISOs may develop a mobile strategy only to find that they have to change it up 12 to 18 months later, he says.
An expanded version of this article appears in the January-February print edition of ISO&Agent.
