The evolution of in-store payments
The work on improving in-store payments with ways of eliminating long queues started long time ago, when Dr Howard Schneider developed the first self-checkout in 1993 at the Price Chopper Supermarket in New York. Since then, the industry has been making efforts to expand the access to unattended terminals and other payment methods that are easy to use for both retailers and consumers. Although online commerce is extremely popular nowadays, at least in some markets, brick-and-mortar stores are also willing to break new ground to ease the work for everyone when it comes to seamless checkout.
It is clearly a great evolution in this space. Some have the tendency to state that the current in-store disruptive payments technology is the result of payments revolution; however, things happened organically, as Cloud, Smart POS, PIN on GLASS or TAP on PHONE have not appeared out of nowhere.
Looking back, we see the cloud-based POS system introduced for the first time in the UK in 2002. Then we jump to 2010, and we witness the NFC functionality added to mass-market mobile phones; moving forward, in 2012, iPADs and other consumer grade tablets were introduced as POS devices. At present, we have cloud-based cash registers, mobile POS, self-scanning machines or…nothing, but the customers and their shopping list, if we think of Amazon Go. Therefore, the end goal of all developments occurring in the commerce and payments space is to streamline the checkout or to have no checkout whatsoever.
The future of POS
The POS systems, which leverage mobile devices, represent a great advancement in the POS industry, and they have become very popular among restaurant’s clients. The order-and-pay features allow customers to simply order their food and/or beverages and tap their phone to pay. It’s like having their own POS, and this is something that gives more control to the consumer.
Although the end consumers are not focused on what happens behind a payment at the POS, and it’s completely natural to not be interested in this aspect, there is a lot of work behind, to make the payment process easy for everyone. The combination of hardware and software is a complex one, yet designed to offer a streamlined payment experience. However, the industry is now considering the removal of hardware and leaving the room just for software terminal, APIs, a mobile device and the software application, along with data insights and broad integrations.
In 2018, the Payment Card Industry Security Standards Council (PCI-SSC) released its standard for software-based PIN entry on commercial off-the-shelf devices, known as PIN on Glass. The technology has caught the attention of many merchants that are looking to simplify payments for their clients. The software offers convenience even for merchants, who are at a download away of the PIN on Glass. This payment technology seems to be an option for those looking to bring a software-only model for in-store payment processing.
In the future, experts believe that the POS will have microservices (or API based), platform-as-a-service and a cloud or serverless model (for mobile devices). Moreover, new POS architecture options will emerge, replacing the traditional models with hybrid architecture.
As regards the adoption of NextGenPOS, new use cases have emerged, as the technology is being used at festivals, concerts or transport. One reason for expanding the use of POS to new environments is partially due to the fact that this technology has become more affordable and easy to use.
Nevertheless, the whole discussion about POS is very much directed to merchants and solution providers, but the message should be clearly sent out to acquirers and ISOs as well, as they also have to get ready for what’s next in this domain.