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Over the past few years, point-of-sale (POS) systems have changed the face of card payments. This uptake has largely been because of the steadily dwindling use of fixed POS systems, which is owing to several factors and the advantages featured by mPoS systems. First and foremost, it is an expensive option. Also, the viability of such equipment is contingent to achieving a certain minimum transaction volume. Needless to say, these conditions effectively exclude small and medium-sized merchants and create an overcrowded marketplace for the big players. Moreover, these devices entail a substantial amount of upfront investment (in the form of rentals) and the cost of maintenance is quite steep as well.

Therefore, the need of the hour for small-and-medium sized merchants is a payment device which entails little or no expense in terms of deployment and maintenance. Moreover, the solution ought to adhere to approved standards of data and payment security via PIN authentication and all security certification standards. And last but certainly not the least; it should leverage both the mobile device and plastic money to the fullest.

Mobilizing-POS

Keep customers close with MPOS

In this context, mobile POS (MPOS) has emerged as a viable option and is often labelled as “disruptive”. The opportunity for MPOS is vast-it mobilizes the existing payment infrastructure, improves business efficiency, customizes services, strengthens consumer engagement and offers a secure transaction environment.

To illustrate, it mobilizes the existing payment infrastructure by extending card payments to new merchant segments such as home delivery merchants; on-the-go merchants and direct sellers. Moreover, it improves business efficiency by ensuring rapid integration of payment acceptance solution with core business operations and generating additional revenues streams with value added services for the merchant acquiring bank.

This is because it potentially drives down the price of regular POS terminals by as much as 50 per cent and offers significant value adds such as EMI payments, mobile top-ups, payment analytics and even cash and cheque reconciliation via its mobile app.

In addition, the fact that cash-on-delivery (CoD) has emerged as the most favoured payment method in many emerging countries also strengthens its business case. For instance, given that small and medium-sized businesses in India mostly accept ‘cash-only’ payments, owing to the large fee entailed in card processing deploying MPOS makes good business sense. It opens up an affordable channel to accept alternate forms of payment, from cards to the mobile handset. For the bigger retail players, MPOS could provide support in managing the workforce, sales force etc. by providing mobile-based inventory management, automatic sales records, etc.

Going forward, industry analysts expect a shift from MPOS to the mobile handset at POS. This would essentially entail customers using the mobile application to facilitate discovery and shopping. It would equip customers with stored value account to purchase good at POS and, most importantly, is expected to drive traffic to merchant locations by delivering an engaging shopping experience.

Net, net, to ensure rapid uptake, the acquiring bank ought to move beyond payments. This can be achieved by ensuring integration with services such as inventory management, customer relationship management, campaigns and loyalty management programmes, offers and coupons, etc.

October 20, 2015 0 comment
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It has often been advocated that mobile POS system is more suitable to small retailers and shops that were till now only accepting cash and are averse to making high investment in accepting card payments using traditional POS machines. While it is an important factor that mPOS costs only a fraction of traditional POS, this is certainly not the sufficient incentive for adoption on any significant scale.

The primary characteristic of a typical small merchant is thin margin and low ticket size per transaction. Once mPOS enabled, charges (merchant discount rate) related to accepting cards would eat into the margins with little promised increase in sales. Insignificant commission revenue and yet to evolve business model disincentivize the acquirers as they would have to cover the cost of merchant acquisition, running the operations, chargebacks, sharing revenue with issuers and payment networks.

Starting approach with small merchants

Addressable market for mPOS will remain any entity, big or small, who accepts cash for providing Goods and Services. The key differentiator would the entire approach and tailored service design for a large merchant and a small one. With huge volumes of transactions and often multiple stores, large retailers need robust, customizable mPOS platforms that are fully integrated with their existing payment systems and other value added applications. On the other side, other small retailers or individuals (e.g. taxi drivers) only need a simple, no-frills mechanism for accepting cards. Before pushing for fancy integrated apps for loyalty, marketing, inventory management etc, the acquirers and the PSPs have to understand the small retailer’s need to appreciate the benefits of accepting card transactions through mPOS viz. affordability, friction-less transactions, increased foot falls and sales. Once this initial phase is over, one can focus at providing value-added services such as those mentioned above by integrating front- and backend processes and results in an efficient, streamlined reporting system, loyalty programs, branding etc. Going even a step further, an mPOS solution can enable a retailer to remotely keep track on overall sales, faster selling items and the inventory position which will help him in taking decisions on inventory management. mPOS has its applicability not only in small retails shops and kirana stores but also the road side fashion street markets, trade shows which have significant profit margins and can have increased sales by accepting card payments.

Another aspect which begs different approach is the distribution strategy. Targeted advertising, specially trained sales force, quick and hassle free on-boarding of small retailers are critical factors in quickly scaling up.

Consolidating approach with big merchants

When mPOS for small retailers did not pick up as much as acquirers wanted to, they turned towards servicing big retailers. mPOS remains valuable to big retail stores, restaurants as mPOS not only act as queue buster but also presents a highly customizable and flexible payment acceptance mechanism. By big retailers, mPOS can result into effecting sales when a customer is browsing through shelves by enabling in-store geo-location through beacons. Targeted notifications can be pushed to consumers visiting the store depending on their location (proximity) and their shopping behavior.

An interesting way to relate to this is how people deal with their mobile phones. A majority of people started their mobile journey with basic features phones. They, I must add after a considerable period of time, then upgraded to basic smartphones and now are switching to high-end smartphones more faster than ever because it not just about the basic requirement of voice or messaging but goes way beyond in controlling many aspects of your life. Same way mobile phones have now become more of a life-assisting and entertainment device, an mPOS can and will be a more than just a payment acceptance device. It has endless opportunities in customer relationship management through loyalty programs, targeted offers and even acquiring new customers. Not only bringing new customers to his shop, an mPOS enables a merchant to take his shop to the consumers. This is especially relevant in this era of e-commerce and popularity of ‘payment on delivery’ payments.

Conclusion

There is no denying that the needs of big retailers and small merchants for mPOS are different. Acquirers and payment service providers must not limit the applicability of mPOS to either of the two; rather it is advantageous to offer a suite of mPOS offerings that meets the need of each type of retailer. As the industry continues to mature, it is inevitable that mPOS, equipped with targeted features and value proposition, will find its place in a wide range of merchants.

July 17, 2015 0 comment
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In today’s competitive environment, technology is the biggest enabler. One of the trends gaining momentum is the adoption of a Mobile Point of Sale system (mPOS, for short).

Benefits offered by mPOS

  • They are ideal for situations where the billing facility is needed on ground– Whether it is restaurants, trade shows, flea markets or even traditional showrooms where mobility of the point of sales is required, mPOS are coming to great use.
  • Improve operational efficiency– They lead to faster order processing, improved accuracy of orders as also greater efficiency in customer checkout, all adding to a business’ operational efficiencies.
  • Improved ability of the sales staff to spend more time with customers– With greater contact time, it adds to the ability of the sales staff to up sell as well as cross sell product ranges. In short it offers a greater opportunity for consultative selling
  • Improve shopping conversions– A mobile POS is known to encourage spur of the moment buys and thereby improve sales.
  • Satisfactorily answer customer queries-With a consolidated mPOS that links with the inventory system, it is easy for sales staff to effectively answer customer queries on availability of products.
  • Digital receipts-With the ability to offer email receipts to consumers it enhances convenience.
  • Enhanced consumer experience-With customers no longer required to make their way through serpentine queues, the mobility of point of sales system goes a long way in positively impacting the overall consumer experience.

From the merchant’s perspective, an mPOS solution offers many benefits:

  • Easy to Implement– With low infrastructure cost and hence low entry barriers, it is an option that works well even for merchants with low transaction volumes. Typically a merchant only needs a mobile phone while the other requirements are given by the vendor in a turnkey manner
  • High on Security-With card data not being stored on the reader, the chances of data theft are eliminated. Also, as it takes away the scope of physical theft as it significantly reduces cash transactions.
  • Streamlines bookkeeping-With added applications that aid building contracts and keeping customer records, the mPOS goes a long way in efficient bookkeeping. It also improves the email marketing capability of the company with its ability to build consumer database.
  • Scalability– With a mPOS solution offering scalability to meet the merchant’s growing transactions, it is a boon especially for emerging markets.

Summary

Clearly more than just being a technology solution, the mPOS offers a range of benefits that help the retailer connect with the customer. While they aren’t set to replace POS systems at least in the short run, their adoption is bound to increase exponentially.

 

July 10, 2015 0 comment
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A Mobile point of sale (mPOS) is a smartphone, tablet or a wireless device which performs the same functions as that of an electronic point of sale terminal .

With the aim of enhancing user experience and keeping pace with the rapid of smartphones, retailers are increasingly adopting mobile POS solutions. For the same, a merchant account, the mobile application and the card reader are required. In fact, any smartphone can be converted into an mPOS with an application that needs to be downloaded. When the owner registers the application, the vendor provides a card readerthat plugs in to the mobile device. Some software vendors also provide optional docking stationscalled sleds that allow the mobile device to read barcodes as also to print receipts.

Depending on the software used, a mPOS can operate as a stand-alone device or an integrated component of a larger POS system. To protect consumer interests, customer data is stored in the cloud and not on the device.

Features of mPOS system

  • Acceptance of payments
  • Issuance of invoice
  • Managing inventory
  • Multi location support
  • Creating customer data base
  • Scan bar codes
  • Integration with ERP systems
  • E mail marketing
  • Analytics

The foremost advantage that accrues from a mPOS system is that it improves customer satisfaction in more ways than one. From speed of billing to doing sales in any part of your physical store or even in any outdoor location, it powers it all. Additionally, if the sales staff is equipped with mobile devices connected to mPOS inventory management systems, answering any customer query related to an article being in stock can be easily answered. Generating digital receipts and building a robust customer data base are some of the other advantages of a mPOS system.

Here are some basic steps to follow before purchasing a mPOS system for your retail store:

  1. Undertake a requirement study to ascertain the features needed in a mPOS system. This includes details like whether a stand alone or an integrated system is required.
  2. Check whether any additional hardware is required and whether the budget is available.
  3. Determine the fixed and recurring costs and set a budget accordingly
  4. Research and compare POS systems- reaching out to businesses who are using the systems will be prudent
  5. Set up a demo and witness the speed, accuracy, ease of usage and more yourself
  6. Make a final decision
  7. Once you have the system up and running, ensure there is optimal usage

Conclusion

With a mPOS system, you can literally run your business from your palm. Clearly it is the single fastest moving trend in retail and will only grow from strength to strength

June 29, 2015 0 comment
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According to the Reserve Bank of India (RBI), as of February 2015, India had over 20.86 million credit cards and 538.03 million debit cards-in other words, quite a bit of plastic money. In fact, these numbers are only going to increase in the near future, what with India’s major banks allowing everyone with an Aadhaar card to open bank accounts. Now, to throw a spanner in the works-debit and credit card players, pay attention-a majority of all monetary transactions in the country are still carried out via CASH!

A dearth of debit and credit cards in India is clearly not the reason for this huge gap. So, what is? Well, for starters, the country had only 1.09 million point-of-sale (POS) terminals as of February 2015, again, according to the RBI. The reason for this dismal number is simple-a POS terminal is an expensive proposition. And the clincher-the viability of such equipment is contingent to achieving a certain minimum transaction volume. Needless to say, these conditions effectively exclude small and medium-sized merchants and create an overcrowded marketplace for the big players.

Meanwhile, the marketplace itself is flourishing. According to stats released by the India Brand Equity Foundation, in 2013, the total size of the Indian retail market was $490 billion and is expected to reach $1.3 trillion by 2020. This potential naturally implies that every retail company-irrespective of size, turnover, etc-will rise to the challenge with rupee signs in their eyes. And an increasing number of POS terminals will magically appear.

The journey for small and medium-sized merchants, however, remains an uphill one-and not just because by and large, they still faithfully propound the virtues of fixed point of sales (POS) devices. As a small side note, it is, in my opinion, an appropriate time to point out that these devices entail a substantial amount of upfront investment (in the form of rentals)-not to mention high cost of maintenance. In fact, fixed POS devices are no friend of merchant acquirers either-think of the funds required for maintenance and all kinds of logistics associated with the machine!

But, wait, there is a light at the end of the tunnel. The magic portion for these players is a payment device which entails little or no expense in terms of deployment and maintenance. Moreover, the solution ought to adhere to approved standards of transaction and data security via PIN authentication and all security certification standards. And last but certainly not the least; it should leverage both the mobile device and plastic money to the fullest.

Enter the mobile POS (MPOS). It wouldn’t be an exaggeration to state upfront that this solution is labelled as “disruptive”, potentially driving down the price of regular POS terminals by as much as 50 per cent and offering significant value adds such as EMI payments, mobile top-ups, payment analytics and even cash and check reconciliation via its mobile app.

Another plus in its kitty is the fact that cash-on-delivery (CoD) has emerged as the most favoured payment method in India. Customers are not always comfortable with making a prepaid transaction on a new website. So, the next best thing is to opt for CoD. Given that small and medium-sized businesses in India mostly accept ‘cash-only’ payments, owing to the large fee entailed in card processing deploying MPOS makes good business sense. It opens up an affordable channel to accept alternate forms of payment, from cards to the mobile handset. For the big boys of retail, MPOS could provide support in managing the workforce, sales force etc. by providing mobile-based inventory management, automatic sales records, etc.

There is little doubt that MPOS has received an enthusiastic response, especially keeping in mind the spate of platform launches last year. However, its long-term success is contingent on a very fluid factor-the uptake of technology by the small and medium business (SMB) segment.

Accounting for over 17 per cent of the country’s GDP (according to a joint report by NASSCOM and Frost & Sullivan), this segment is very crucial, to say the least. Traditionally, its relationship with technology has been a difficult one, as it chose to adopt IT in a selective manner. Things changed soon enough, though. Despite its size, the SMB segment faces many challenges, such as fragmentation, unorganized growth and scalability issues, to name a few. Hence rose the need to streamline operations, standardize processes and enhance productivity and quality of products and services.

Today, led by the retail and hospitality segments, the SMB sector remains one of the biggest spenders in this regard. To illustrate, as per a report released by NASSCOM in association with Frost & Sullivan, the Indian SMB market spent about $8.7 billion on IT in financial year 13. Of this, 45 per cent was spent on hardware, while 40 per cent was on IT services (implementation, support and training) and 15 per cent was on software licensing and software as a service (SaaS). Going forward, the segment’s pockets will continue to be deep-the SMB segment is estimated to witness a 15 per cent year-on-year growth, which will propel the IT spending in the sector over $18.5 billion by financial year 2018.

Of all the overall technology solutions available, industry experts reckon that cloud adoption on will be a key element to transform the SMB ecosystem. The platform’s inherent advantages such as low CAPEX and TCO, flexible storage options and easy data management is beckoning these players. As a result, SaaS adoption by Indian SMBs is growing at a CAGR of 25 per cent and is expected to reach $370 million by financial year 2018. A significant portion of SMBs would continue to focus on business software and enterprise applications, mainly for an integrated business view.

That apart, these players have realised the value of an all-encompassing presence online. Subsequently, they have their own digital store front or tie-up with e-commerce majors, like FlipKart and Amazon.

To illustrate, Amazon is offering various interesting services and tools to Indian SMEs, in addition to the “Sell on Amazon” facility.  For instance, it has opened up the global markets for products manufactured by Indian SMEs, with the help of Amazon’s Fulfillment by Amazon facility-where Amazon will pick, pack and ship to customers directly.

Moreover, the big boys of e-commerce, including Snapdeal, Flipkart, Amazon and eBay are coaching small traders on how to use a computer, send emails, click a photo and upload products. It doesn’t end there-apart from the bells and whistles, also on the agenda are more serious tasks like warehousing and inventory management. The bottom-line is simple and a win-win situation for both parties. Use digital literacy as bait to lure more sellers into the booming e-commerce marketplace. More users imply more products which ultimately imply more customers.

To conclude, the point of this blog wasn’t to extol the virtues of MPOS, but to remind my readers that the SMB segment is rising-and fast. The secret sauce for success, therefore, is for players to create a mash-up of MPOS-based payments with frills like inventory management, customer relationship management, campaigns and loyalty management programmes, offers and coupons, et al. Voila? Not quite yet. Cash is still the king.

May 21, 2015 0 comment
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