VeriFone's Future Is 'On Screen'

VeriFone is developing a number of uses for the video screens on its point of sale terminals, which can display advertising and other content.

"Whether it's at a gas pump or at a 20 minute taxi ride, we're working toward enabling merchants and brands to engage with consumers," said VeriFone CEO Paul Galant during the terminal manufacturer's fiscal third quarter earnings call on Sept. 4.

Digital media is part of what Galant described as a commerce enablement strategy to increase business among merchants and bolster VeriFone's earnings. The strategy also includes developer tools and emerging retail marketing and payment technology such as beacons.  The mix of innovation enables targeted offers to consumers' cards and smartphones, with redemption at VeriFone's merchant point of sale terminals, Galant said.

"[Commerce enablement] gives control to merchants and improves the effectiveness of their marketing to create an in-store experience that's at least as good as what consumers expect online," Galant said.

The video content on screens at gas pumps can drive extra revenue, which VeriFone says can help offset the cost of the EMV-chip card migration in the U.S. for gas stations, which face a 2017 deadline for adopting EMV payments (after that date, gas stations face a shift in fraud liability).

"There's an opportunity to grow advertising revenue and deliver incremental sales to merchants and brands," Galant said.

VeriFone's recent partnership with gas station equipment supplier Gilbarco Veeder-Root will give VeriFone's video point of sale and EMV-card strategy a major boost, Galant said. "In the U.S. petroleum market it creates an opportunity to expand our EMV terminal solution," he said.

VeriFone is also placing digital media into taxis in new markets, including Turkey and Mexico. The taxis will use the Way2Ride mobile payments app, driver-facing tablets and the VeriFone Digital Network to deliver content. The company will focus initially on payments and ordering with marketing and other content added later.

"It's closing the loop between traditional marketing and commerce," Galant said, adding there was potential for commission revenue based on incremental sales from digital marketing at the point of sale.

For the quarter ending July 31, VeriFone reported net revenue of $476 million, compared to $416 million in 2013, a 14% increase. The company revised its full year expectations upward to $1.863 billion from $1.858 billion, as it recovers from a slump in 2012 and 2013.

"This is a good result and one that signals the strategy is working and the global market for terminals is growing," said Galant, noting that the EMV migration in the U.S. and terminal placement deals in Turkey, France, China and Germany are driving revenue improvement.