SAN DIEGO–No one has brandished a crystal ball, but payment-terminal makers here this week at the ETA Annual Meeting & Expo still have had plenty to say about the future.
Their vision of things to come hinges on the possibilities unleashed by what they characterized as the current convergence of payments, technology, media and mobility.
More specifically, VeriFone Systems Inc. and Hypercom Corp. were touting their newfound ability to link the once-lowly payment terminal to the lofty computing cloud, defined by many as the interconnectivity of multiple computer servers.
That symbiosis, with a dash of mobile capability thrown into the mix, could enable new functions, such as social couponing, while preparing the industry to incorporate other new functions as they come along.
“It’s a perfect storm of new technology that’s coming in the next two or three years,” David Talach, VeriFone vice president of global product marketing, tells PaymentsSource.
New approaches are moving payments from the end of the transaction to an earlier point in the exchange, Philippe Tartavull, Hypercom president and CEO, said during an interview at the company’s exhibit booth.
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 bringing convenience to consumers, driving business into stores and providing independent sales organizations with new products to sell, couponing and other new services move the terminal-making companies “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 Minden, Nev.-based payments-consulting firm.
At the show, San Jose, Calif.-based VeriFone is touting its new Paymedia, a system 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, as well as whatever functions the future might hold, Talach said in an interview.
The system, intended for small and midsize retailers, also updates terminals remotely and automatically shuts down compromised terminals, he noted.
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 warned ISOs and third-party associates.
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 of computing power, Talach maintained.
VeriFone’s vision for the future shares much with prognostications by executives at Scottsdale, Ariz.-based Hypercom. (VeriFone expects to acquire Hypercom’s non-U.S. operations later this year; French terminal maker Ingenico SA plans to acquire Hypercom’s U.S. payments-systems business (
At the ETA show, Hypercom is promoting its Intellinac network-access controller, which puts power into the hands of small merchants for a very small investment as payment terminals take on functions now associated with smartphones, said William Rossiter, Hypercom vice president of marketing.
As a result, ISOs will find themselves offering loyalty programs to even the smallest merchants, Rossiter said. Rewards schemes 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 noted.
ISOs may bundle loyalty and other functions supported by Intellinac with the payments-processing services to differentiate themselves from competitors, Rossiter suggested.
Both Talich and Rossiter said ISOs have a sales opportunity in the new systems.
“We see the ISO community as critical for the success of this concept,” Talich said of the new technology. ISOs, he said, will take the news of the emerging functions to the merchants they already call upon for today’s payment services.
