Payments may be best hidden, even from merchants

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One of the big ideas payment technology execs push is the backgrounding of the transaction — often called the "Uberization" because of how well the ride-sharing app Uber accomplishes this feat.

In that example, the payment becomes a supporting actor to business functions such as marketing and business management. The new Amazon Go store concept, which removes the checkout process entirely, is a more aggressive form of the same concept.

"Payments is very much of a commodity," said Michael DeSimone, CEO of the point of sale technology vendor ShopKeep. "The differentiation is the functions that wrap around it."

The challenge, of course, is in figuring out which of functions are the best shell to hide payments underneath. ShopKeep's hiding place is, appropriately, named Pocket.

The Pocket app leverages payments data to monitor business functions, and it's expanding quickly, DeSimone said. About 15,500 of ShopKeep's 24,000 storefronts have downloaded the iOS version of Pocket in about a year, and ShopKeep just introduced an Android version to cover most of the rest. Pocket tracks business performance data and resides alongside the company's iPad point of sale system, but it does not require logging into the merchant's back office system.

As commerce functions continue to increase in visibility and value, the role of payments in the point of sale process will continue to diminish, said Thad Peterson, a senior analyst at Aite Group. "The addition of non-payment related functionality to a point of sale app creates real value for the merchant well beyond the mere completion of a transaction."

While most business owners want to use payment data to inform management and track general sales volume over time, different categories of businesses are interested in tying transaction data to different things, DeSimone said.

ShopKeep has found full-service restaurants and retailers want to monitor sales and staff performance, he said. Among quick service restaurants, the needs are often more basic, he said.

Retailers are also interested in tracking design, which is feeding new updates to the app to add more detail on sales and items in the inventory, DeSimone said. "They want the inventory information to be more flexible, so we have information about colors for closing, or size of the item."

Mobile point of sale companies are adding a variety of ancillary functions to woo merchants—Square for example is building a network of restaurants for mobile ordering and has expanded its lending business; and retail industry experts such as Infinite Peripherals Andrew Graham are encouraging merchants to seek out a variety of services when picking a mobile point of sale company.

Processing payments is a must-have, but that’s an entry level capability when it comes to fully featured point of sale systems, said Rick Oglesby, president of AZ Payments Group.

"Business owners are always concerned about scale, which means being able to do what they do more efficiently in more places and with less time commitment. That means being able to put systems in place that, to whatever extent possible, allow them to be in many places at the same time," Oglesby said.

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