Verifone's Vin D'Agostino insists there's a special mix of cloud technology and hardware that can address all of merchants' needs but only if they are willing to buy it all at once.
The payment technology company is releasing new products in rapid fire, as part of what it calls "the year of the product." In the past several weeks it's announced a new cloud delivery system for point of sale technology, a hosted payments-as-a-service suite of products and services; and made a deal to bolster data and identity fraud protection.
"What we have put together is a suite of mobile software that runs on hardware that merchants can use for payments, service and [mobile point of sale] benefits such as line busting," said D'Agostino, Verifone's global head of commerce enablement and business development. "We're making these systems future proof."
Verifone is expected to benefit from the U.S. EMV migration by selling the necessary point of sale hardware upgrades, but merchants face myriad challenges beyond accepting EMV-chip cards. They have to make quick decisions on what type of mobile wallet technology to support and the best way to embed new payment options with customer service, CRM and security systems.
Verifone has been planning for the intersection of EMV and mobility for more than a year, and is also pushing its range of support services, software and hardware to the merchant-acquiring community to bolster uptake among smaller merchants.
More than a third of U.S. payment terminals are currently EMV-ready, D'Agostino said, adding about 70% of tier one merchants have made the migration. "The next chunk is hospitality and then you'll see small business," he said. "What we want to do is extend our architecture to simplify the migration."
Verifone's strategy to combine mobile technology, NFC contactless acceptance and EMV as part of the same investment makes sense, but there are some roadblocks, said Tim Sloane, vice president of payments innovation for Mercator Advisory group.
"Given that [mobile point of sale] will be the new normal going forward, making the investment now while adopting EMV and NFC would be most cost effective for merchants," Sloane said.
However, mobile point of sale technology has its own issues. Mobile payment apps lack a robust and standardized security model, Sloane said, adding that this is typically mitigated with a patchwork of risk management tools.
"These will ultimately be replaced with trusted secure computing hardware that works with the [operating system] to protect the device over the next four to six years," Sloane said.
Also, many merchants have not updated their infrastructure to support the cloud computing architecture that enables the mobile point of sale, Sloane said. "This will take several years to achieve, in some instances more than six years."
As a result, many merchants will prefer to make further investments in the technology that they have already deployed, rather than buy a new bundle of technology to replace their older systems. Some will say mobile point of sale is not relevant to their needs, while others will view mobile point of sale as a more forward-looking technology, Sloane said.
"I doubt a point of sale provider must have a mPOS solution today for the mid and large market, but they absolutely need mPOS solutions today to address the needs of small merchants," Sloane said.