A growing number of payments technology providers are targeting small businesses with mobile point of sale offerings, creating a tech boom for a merchant segment that’s often been underserved.
“The market is ripe, there are a lot of well-established players out there who see an opportunity to reach small-to-medium businesses and merchants,” says Drew Lewis, a product manager at Leaf. “The payment companies in the space are racing full steam ahead to get products out into the market.”
“With our open platform, it’s going to be advantageous to have the camera out there for anyone who wants to create new apps for the tablet,” Lewis says.
The Leaf product launch comes amid a flurry of new mobile POS hardware and services offerings introduced this week.
“The mobile point of sale space is becoming a very crowded space and in many ways, it feels a bit like a gold rush again,” says Zil Bareisis, a senior analyst at Celent. “The providers understand that card acceptance capability by itself is no longer differentiating, so they are all looking to add new services to the portfolio, whether it’s around processing, analytics, point of sale registers or even launching new payment schemes and consumer-facing wallets, such as Pay With Square.”
The target market is also changing, Bareisis says. “If it started with microbusinesses and sole traders, it is now definitely catching the imagination of bigger businesses,” he says.
“This is also beginning to impact the traditional acquiring market, as merchant expectations around pricing, transparency, onboarding and overall experience are starting to change and the acquirers have to respond,” he adds.
Michelle Evans, a Chicago-based consumer finance analyst at Euromonitor International, is observing the same phenomenon.
“We’ve already seen mobile point of sale explode over the past couple of years. It was initially a target for small businesses and people that were one-man shops that didn’t accept card payment before,” she says. “But it’s moving beyond that to chains like Nordstrom, where the clerks check out people with iPod Touch devices.”
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In an attempt to differentiate from the large number of players in the space, Payleven’s new product also embeds functions beyond payment acceptance, says Ian Marsh, a product director at Payleven, who says the cloud model is designed to lower the cost of ownership. A subscription to the Kachng service costs as little as $75, with the readers starting at about $136.
“We’re able to inventory control, coupons, discounting, etc.,” Marsh says, adding the product also monitors transactions to help businesses manage data, calling it “Wal-Mart level tech for a smaller store…You can track which payments were done with cards or which one were done with cash.”
Vantiv, which is partnering with NCR to release merchant payments technology, is also bundling tablet point of sale capabilities with broader management—in an effort to reduce the amount of hardware and attachments used to execute payments, manage store operations and analyze customer purchasing activity.
The first release from the partnership is the Vantiv Mobile Checkout powered by NCR Silver—which targets small stores and regional chains that use iPads to accept card payments.
“The small business owner gets access to a tablet-based point of sale system, a very powerful marketing engine, a CRM tool, a back office inventory manager and a reporting and alerts engine,” says Christian Nahas, vice president of the small business group at NCR.
Vantiv and NCR are hoping to reach the half of the U.S. small to mid-sized business market that’s considering moving to a tablet or mobile point of sale system, according to McKinsey and Company.
“We can all agree the space is big and growing,” says Elizabeth Rector, senior vice president and marketing director of strategic verticals for Vantiv. “But the more interesting aspect of that is the businesses are ready for change from traditional point of sale systems.”
