Asked how Equinox Payments LLC is responding to newcomers entering the terminal market with inexpensive card-swipe devices, Will Rossiter, the company's senior vice president of sales and marketing, retorted with his own question: What is mobile?
The answer, he said, varies.
The strategies employed by the long-time leaders in manufacturing payment terminals also vary as they respond to the likes of Square Inc., which this month said that some 2 million individuals and small businesses are using its dongle and mobile application to accept cards using smartphones. Larger companies such as Intuit Inc., which offers the GoPayment mobile card reader, are also becoming a threat to traditional terminal makers.
Even some independent sales organizations, which grew up as resellers of devices offered by the legacy terminal makers, have begin to offer their own mobile-payment dongles, which plug into a smartphone to allow users to accept payments by swiping a card.
Whereas VeriFone Systems Inc. and Ingenico SA produce their own dongles to address the needs of so-called Level 5 merchants that previously did not accept cards for payment, and where Square is making its presence known, Equinox (formerly Hypercom) instead will work with third-party providers of the devices when faced with requests for the technology.
Equinox chose its strategy in part to avoid competing with its customers.
"The providers of dongles are routing transactions to their own gateways," Rossiter says. "We see much more opportunity to not try to take a piece of the transaction but instead to enable additional services to those merchants for our processor and retail partners."
Not surprisingly, Equinox's chief rivals view that posture as flawed because it suggests the company doesn't have a complete mobile strategy.
"Equinox doesn't have a (mobile) solution," says Greg Boardman, Ingenico senior vice president of product and development. "In terms of a mobile strategy, there's nothing there."
Ingenico got into the dongle business in February with its investment and controlling stake in Roam Data Inc., whose RoamPay application can work with virtually any mobile operating system. Rival VeriFone offers the Payware Mobile sleeve for smartphones and tablets; it joined the dongle fray in March with its launch of a smaller device called Sail.
All three legacy manufacturers say their prime differentiator is their ability to accommodate merchants' needs as they grow.
Indeed, it's at the point of a merchant's maturity where the channels the terminal makers traditionally have used to sell their products–the ISOs and agents–come into play and even further distinguish the legacy players from the newcomers, notes Paul Rasori, VeriFone senior vice president of global marketing.
"The channels perfected the ability to board merchants and collectively outsmart Square and make sure those types of merchants stay with traditional service providers that provide good service," he says.
Though various ISOs offer their own mobile card readers, it remains to be seen whether these products are a widespread success or adjuncts to the ISOs' overall portfolio, Rasori says.
In any case, the three leading terminal makers say these new competitors are not going to wipe out the ISO market. In fact, the emergence of EMV and Near Field Communication technologies will make reliance on the industry knowledge such entities have all the more significant, they say.
"If I'm an ISO and I'm looking at the changing business needs of even small merchants, there's a lot of opportunity there to be had," says Ingenico's Boardman.