The EMV and mobile wallet movements have split the retail industry, leaving payment companies in the delicate position of having to support clients with very different technological profiles.
This split is also happening on the consumer side, leaving some merchants with multiple payment acceptance devices to accommodate different needs at the point of sale. First Data's goal is to consolidate these products into its Clover Go mobile point of sale device, which has support for EMV, NFC and card swipes.
There is a lot of point of sale technology already in the market that powers all three major payment methods, including other products in the Clover line. But the more complex offerings are typically based on tablets or other hardware that is not meant to leave the store. Even Square — the pioneer of "dongle" payments — divides its catalog into NFC and non-NFC payments.
What's different with this new release of Clover Go is it enables remote smartphone-based in-the-field payments for all three payment types.
"Small merchants don't always work in a store, and they don't always have a terminal with them," said Jeff Hack, executive vice president of global business solutions for First Data, primarily overseeing small to medium sized businesses.
The new Clover Go is a small piece of hardware that pairs with a merchant's smartphone or tablet, and can attach the phone physically or wirelessly (a design choice that makes it compatible with the newest iPhones, which lack a headphone jack).
"We're in this transition phase, where you have a whole lot of swiping going on and most folks are getting used to dipping their cards and mobile payments are more prevalent," Hack said.
It's likely that more phone makers will ditch the audio jack as they strive to make handsets resistant to water and dust contamination, said Tim Sloane, vice president of payments innovation and the director of the emerging technology advisory service at Mercator . "Based on that I’d expect it will slowly disappear, but likely very slowly."
But regarding Clover and other mPOS solutions, Bluetooth is a fine solution for payments as long as the security has been carefully applied, Sloane said.
"The encryption should of course be implemented in the magnetic head or the chip reader and the Bluetooth software on the reader should make sure it can be paired with only the right device and no others." Sloane said.
The introduction of EMV has also forced changes on the mobile point of sale industry, since their new hardware is more complicated and can't be offered economically for free.
Square faced some pricing challenges when introducing its EMV/NFC combo reader, causing it to shift its fee structure. First Data's updated Clover Go device sells for between $79 and $99, though Hack said that in many cases the price is embedded in the merchant's' processing volume for the first few months. First Data also hopes to benefit from improvements in EMV processing time—earlier this year First Data clocked an EMV transaction at 3 seconds, and its rival Squarehas also cut time for chip card transactions.
First Data envisions smaller merchants using the updated Clover Go, but also larger retailers that set up "pop up" stores to serve festivals and college activity fairs. The system retains other Clover Go features, such as multi-user functionality to support stadiums, restaurants and other public events; and an entitlement features that allows business owners to tier functions, such as allowing only senior employees to offer refunds.
"The concept of 'future proof' payment acceptance is being baked into new POS solutions across the ecosystem," said Thad Peterson, a senior analyst at Aite Group. "It makes sense to offer merchants of any size the ability to accept any type of payment with every form factor, because not accepting the payment can mean losing the sale. It’s great timing by First Data to launch immediately after the iPhone 7 announcement; it adds relevance and immediacy."