Organizing the Mobile Point of Sale Ecosystem | March 2013 · The MPOS Organizing Methodology: ......
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Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
This report has added 5 new players to
the MPOS Pyramid™ and offered new
insight into the range of players and
services entering the space.
The big takeaway: MPOS is enabling the
capture of a very critical asset sought by
merchants large and small - data. If you
want to know why large retailers are
making such large investments in MPOS –
that is certainly one of the big reasons.
.
The March 2013 MPOS Tracker™
While the big takeaway in February’s report was that a tremendous amount of value was being driven
by bundled solutions, in March we will learn that MPOS is helping to solve a very important “data”
problem that physical merchants have today. That problem? Unlike online merchants that capture
customer name, email and billing/shipping adress, most physical merchants don’t know what customers
are in their stores. The absence of that data means that
they have a very limited ability to interact with that
customer before, during and sometimes even after the
checkout process unless they ask customers to fill out
“customer cards” - which few customers actually do and
even fewer merchants ask customers to do. MPOS
solutions, even at their most basic level, enable
merchants to capture (and even organize) basic
customer contact information. Tablet-based MPOS
solutions that literally put commerce into the hands of
sales associates means that they can engage with
customers, provide an even richer opportunity to link
purchasing intent, preferences and habits with a
customer profile and secure a client relationship. If you
are wondering why so many large merchants are
spending the money to put MPOS solutions in the hands
of their sales associates, this is certainly one of the big reasons that they are wiling to belly up to the
MPOS bar.
March 2013’s report features 5 new players to the MPOS Pyramid. The new merchant facing players are
Blue Bamboo, Flint, SofSpace, SpirePayments (Thyron), and PaySimple. In addition, we’ve updated 6
players from prior months. They include the following merchant facing players: Adyen Shuttle, Intuit,
NCR Silver, PayPal, Payleven and Sales Vu.
A Monthly Update on the State of the Mobile Point of Sale
Ecosystem
A PYMNTS.com Report Sponsored by ROAM
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Key MPOS Insights | March
As goes new payments channels, so goes concerns with the security of cardholder data. The
increasing popularity of MPOS solutions, especially with new card accepting small/micro-merchants,
has increased the decibel level over the need to protect cardholder data. March 2013 was the
month that the PSCI Security Standards Council released new guidelines aimed at equipping
developers, merchants and payments processors with the information needed to close the loop on
those concerns. The guidelines center around three key areas: the security of a payments
transaction, the security of a mobile device and the security of the payment acceptance system used
by the merchant. The PCI standards suggest strongly that until mobile hardware and software
solutions can meet these guidelines, the best option for merchants is to use a PCI-validated, Point-
to-Point Encryption (PCI P2PE) solution.
iPads and iPod Touch(es) retail revenues in big ways. JCP’s CEO Ron Johnson told Wall Street
analysts at the beginning of March that twenty-five percent of its store sales came via MPOS devices
and that all store associates will have handheld iPod Touch devices by the end of May. This comes
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
on the heels of Nordstrom’s first-mover decision to do the same about a year ago. More recently,
Barneys (7 of its 24 stores), Urban Outfitters (all of its stores and affiliated brands), Coach (all of its
factory outlet stores) and REI (120 stores) have all made the move to MPOS devices to make it
easier for consumers to transact and for associates to capture better customer information.
MPOS is where the innovation action is. The Innovation Project 2013, an industry convening at
Harvard in March hosted by PYMNTS.com, highlighted the significance of MPOS in driving
innovation in the retail environment. Ten percent of the 40 newly “birthed” innovators that were
showcased at the Innovators Expo were MPOS solutions of one form or fashion, and The 2013
PYMNTS Innovator Awards winners had a category dedicated entirely to MPOS solutions. Gold,
Silver and Bronze Medal Winners in that category were Groupon/Breadcrumb, LightSpeed and
GoPago respectively. Three other Gold Medal winners (of the 15 categories) were also MPOS
solutions or included them as part of their solutions: Square, PayPal (for POS including PayPal Here)
and Intuit/Go Payment.
The MPOS Organizing Methodology: The MPOS TrackerTM Pyramid
The organizing framework for the MPOS ecosystem is the MPOS PYRAMID™. It’s a graphic
representation of where we think merchant facing service providers fit in the market. As stated earlier,
it’s not designed to suggest that one part of the pyramid is better than another; but rather to depict the
characteristics of MPOS solutions. That means that the tip of the MPOS PYRAMID™ doesn’t imply the
“best” it simply implies that the fewest players are concentrated there given the various elements of the
service offering that those merchant facing players provide to their merchants.
MPOS PYRAMIDTM Methodology
We have divided the MPOS market into “layers” representing the broad set of capabilities included in
the MPOS service offerings. This, we hope, more easily helps to categorize the MPOS ecosystem by
focusing on the capabilities that the various players who serve the merchants in this market offer them.
The “powered by” players are organized on the outside of the MPOS PYRAMID™ and aligned with the
appropriate capabilities that they “power” inside of the pyramid.
Here’s how we have used the MPOS PYRAMID™ to organize the MPOS sector.
Core. Players in this quadrant offer only the basic hardware/ card reader solutions to merchants that
enable mag stripe card acceptance and merchant processing services. Players in this space also have
provided some level of security encryption, although the level of security varies by powered-by provider.
This is where many players enter the market to establish an MPOS presence and merchant base.
Core + Back Office. Players in this quadrant have offerings that provide value-added solutions that
enable merchants and other SMBs to perform important back office functions. These functions include
tracking/managing inventory, creating invoices, integrating with accounting systems and/or other
applications that assist merchants and SMBs in managing their back office.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Core + Front Office. Players in this quadrant have offerings that provide value-added solutions that
enable merchants and other SMBs to perform important customer-facing functions. These functions
include loyalty, marketing, CRM and advertising solutions that enable merchants and SMBs to more fully
manage support marketing, sales and customer retention activities.
Core + Front and Back Office. Players in this quadrant have offerings that provide value-added solutions
that enable merchants and other SMBs to support both front and back office functions as described
above.
Merchant/Consumer Network. Players in this quadrant have offerings that leverage mobile technology
to serve both the merchant/SMB and consumer. These players provide core + front and back office
capabilities along with consumer-facing applications such as digital wallets. These players use mobile
devices and other assets on both the consumer and merchant side to create a network enabled by
mobile devices (phones and tablets) and relevant applications.
Open Platform/API. Merchant-facing players in this layer are serving merchants directly but have also
made a decision to open their hardware/software services to developers via APIs. This is an effort to
expand the number of merchants/SMB’s that they can reach as well as to make it easier for their own
solutions to be enriched by other developers who can add functionality to the core offer.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
MPOS Player Profiles | New for March 2013
Flint Mobile
Category Core
When Launched November 2012
#Customers/volume More than 30,000 mobile app installations after first 3 months.
Customer Focus Small Businesses
Geographic Coverage United States
Pricing
Fees for debit card transactions are 1.95% + $0.20 per charge. Fees
for credit cards are 2.95% + $0.20.
Flint is a MPOS solution that does not require a dongle or peripheral device to accept physical cards. It,
instead, uses proprietary image scanning technology to scan the main card number complimented by
keyed entry of card verification details. The patent pending technology allows the mobile device to
securely capture the credit card number without taking a photo of the full card and without storing card
images on the device. Flint has integrated real-time fraud detection and several payment gateways to
enable real-time transaction authorizations with a PCI compliant gateway partner. The solution works
on iPhone, iPad or iPod touch devices and only in the US.
SoftSpace
Category Core
When Launched March 2012
#Customers/volume n/a
Customer Focus Small to medium sized businesses
Geographic Coverage 9 Countries including Kuala Lumpur, Malaysia, Thailand, North
America, Australia, Indonesia and the Philippines
Pricing
n/a
Soft Space is a MPOS solution that can accept EMV payments and is Level 1 and Level 2 certified and
multiple forms of card payments. In October last year, Soft Space teamed up with MOL (a Malaysian
company that develops and operates payment systems) to process its transactions. The SoftSpace
device is provided by ID Tech.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Thyron/Spire
Category Core
When Launched 1989
#Customers/volume n/a
Customer Focus Financial and Retail organizations
Geographic Coverage Europe, mostly Spain and the UK
Pricing
n/a
Thryon is the only MPOS solution that is fully compliant with Visa Europe’s recommendations for mobile
payment applications. It was acquired in March by Spire Payments, the third largest MPOS player in
Europe in March of 2013. Spire provides Chip and PIN / PCI SRED certified mobile point of sale (MPOS)
solution alongside the new range of Spire Payments terminals, due to be rolled-out in Q2 of 2013. Based
in London, Thyron will become a wholly owned subsidiary of Spire Payments UK Limited, and will
become the focal point for Spire’s strategy on mobile payment technology and products.
PaySimple
Category Core + Front and Back Office
When Launched March 2013
#Customers/volume n/a
Focus Small and Medium Sized Businesses.
Location US and Canada
Pricing Monthly subscription fee of $34.95 2.29% + .29 for credit card transactions and $.55 for ACH Merchant must have a merchant account
PaySimple, creates cloud-based, receivables automation technology for small businesses that help them
collect and manage their receivables and payables. March was the month that they expanded into
MPOS with an iPhone and Android app that not only processes electronic transactions but also manages
customer databases and can handle recurring payments. In addition to processing debit and credit
cards, these apps also process ACH payments, can create and access customer lists and profiles, and
collect payments from existing customers without making merchants re-enter payment credentials. The
device is provided by Anywhere Commerce.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Blue Bamboo
Category Core
When Launched December 2012 (Beta released June 2012)
#Customers/volume n/a
Focus Mobile sales and services, Transportation and delivery, banking and
hospitality
Location US
Pricing N/A
The Blue Bamboo PocketPOS™ P200 Card Reader allows the transaction of iOS and Android products,
other smart phones and tablets into a secure POS solution to read the cards that follows the standards
of ISO 7813. It supports Bluetooth™, Smartcard, contactless, MSR, Pin Entry technology, in addition to
wireless mobile application printing.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
MPOS Merchant Facing Players | March 2013 Updates
Adyen Shuttle
Category Core + Back
When Launched December 2012
#Customers/volume Three Merchants: Gidsy, Teicketscript, and De Bijenkorf
Customer Focus Small specialty retail to medium to large sized businesses
Geographic Coverage European Union
Pricing
€99 to purchase and €10/month + interchange fee that varies from
country to country
Adyen is best known for its role as online and mobile services gateway for large European-based
enterprises like Vodafone, KLM and Groupon. But it changed its game a bit when it launched its own
MPOS solution, Shuttle, on December 2nd. Shuttle enables merchants to accept Chip & PIN payments
from a mobile device and is said to be fully EMV complaint. But what’s different about Shuttle is that it
connects to iOS and Android smartphones and tablets wirelessly via Bluetooth and has built-in key-pad
and OLED display. In addition to the more “standard” back office capabilities that it enables such as
emailing receipts to customers, it is able to leverage its online platform to enable the delivery of risk and
fraud modules, user management, payment reporting and other features typically required by multi-
channel retailers it helps merchants bridge the on/offline worlds. It is said to be able to match customer
information from cards used on its online properties when that same card gets used in stores, enabling a
host of merchant-enabled opportunities that leverage that information.
The Shuttle device is PCI PTS V3.0 Certified including Open Protocols and SRED UKCC Certified,
MasterCard TQM Certified, and CE, FCC and IC certified.
Update: Processing fee varies from country to country between 1.60% - 3.95% for credit cards and a
range for debit transactions.
Intuit GoPayment
Category Core+Back Office When Launched August 2009 #Customers/volume 200,000 Focus SMB, political campaigns Location US Pricing 2.75% swipe and 3.75% keyed in rate or $12.95 per month. 1.7% per swipe
2.75% keyed in rate in the US.
Intuit launched GoPayment in 2008, as a way for small businesses to improve sales and cash flow by
using their mobile phones to accept card payments. The solution was targeted mainly to service
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
businesses (plumbers, electricians, field service personnel) who were not card accepting merchants but
viewed electronic payments as an opportunity to get paid immediately after the job was finished or an
order taken. Since that launch, GoPayment has expanded beyond payment card acceptance with a
magswipe strip. GoPayment has also developed a concept demo to process NFC using GoPayment and
includes integration with Intuit’s QuickBooks Point of Sale and financial software, including inventory
management, reporting, trends, etc.
Update: Intuit Pay officially launches in the UK. Similar to Intuit’s US offering, Intuit GoPayment, the
offering will integrate easily into Quickbooks
NCR Silver
Category Core + Back + Front Office When Launched July 2012 #Customers/volume n/a Focus Bringing big business technology to small businesses
Location US
Pricing
Full hardware package is $599 a month to connect a mobile device. First device is $79/month and additional are up to $29/month. ($.10 per transaction up to $29).
NCR has entered the MPOS space with NCR Silver that gives small business owners IP-enabled/mobile
transactions and detailed inventory, sales and profitability reporting capabilities using a tablet device.
The system uses an iPad app that comes with a stand and connects to an NCR wireless receipt
printer and cash drawer. NCR Silver provides a dashboard, where users can track inventory, profits and
losses and run customer relationship management and email marketing applications.
Update: mobile point-of-sale (POS) will now make it possible to load, manage and withdraw gift cards
from the Point-Of-Sale (POS) devices
Payleven
Category Core + Open
When Launched June 2012
#Customers/volume 1,000 Merchants in Berlin for trial
Focus All merchants
Location Germany, The UK, Italy, Brazil, The
Netherlands, Poland and Spain
Pricing 2.75%
Launched by the entrepreneurial Samwer brothers, Payleven, is a mobile payment system available for
iOS and Android. Founded in Germany, the company has expanded operations to the UK, Italy,
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Netherlands, Poland and Brazil. The system processes basic card payments, to enable small and
independent merchants to accept payments. Originally only able to accept MasterCard and local bank
cards in Germany and the UK, Payleven announced in early October 2012 that they accept Chip & PIN
payments. This move is said to make Payleven the first pan-European MPOS company to be fully
complaint with the standards of all major credit and debit cards.
The company has released a Chip and PIN reader. Payleven has established a partnership with Berlin
Brandenburg Taxi association, Taxiverband Berlin, to trial their new payment reader. The system is being
used by about 100 taxis in Berlin.
Update: Payleven is now authorized as a payment institution by the UK’s Financial Services Authority; and it is also now a certified MasterCard’s mPOS partner.
PayPal Here
Category Core + Network
When Launched March 2012
#Customers/volume 200,000 Merchants
Customer Focus All areas of business, merchants
Geographic Coverage US, Canada, Japan, Hong Kong, Australia and UK
Pricing
2.7% transaction fee, with no monthly fee. The fee for non-swipes goes up to
3.5%, with a $ 0.15 fee
PayPal Here is a PCI compliant MPOS solution that allows SMBs to accept electronic payments, payment
by PayPal and check by leveraging its Card.io acquisition to enable a user’s mobile device’s camera to
scan the front of card to input the numbers and expiration date. PayPal Here also allows users to track
cash payments.
Update: PayPal added a tablet version of its MPOS solution, PayPal Here, to its offerings to enable
barcode scanning and wireless connectivity to cash drawers and printers. PayPal’s integrated
technology from Red Laser enables merchants to scan and load a list of merchandise that they sell to
via their MPOS systems which provides robust inventory management capabilities.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Sales Vu
Category Core + Front + Back
When Launched August 2011
#Customers/volume n/a
Customer Focus SMB through upper Mid Market, targeting the restaurant, retail and
service industries
Geographic Coverage US and Canada
Pricing
2.7% flat processing rate for both swipe and keyed transactions in
the US and the Canadian rate varies from 1.73%-3.26% per
transaction
SalesVu offers an iPad and iPhone POS system that targets the POS needs of the restaurant, retail and
service industries, including those with multi-locations. The company will release its Android solution in
early 2013. The platform expands beyond payment acceptance to include cloud-based enterprise
reporting of the entire business, management of customer history, integration into Quickbooks, online
ordering and an open API to enable new functionality to be added as developed. In addition, the
program offers retail and hospitality- specific POS services, like receipt splitting, tracking of order
histories and inventory management.
Update: Pricing in Canada is different than pricing in the US. 2.7% flat processing rate for both swipe
and keyed transactions in the US and in Canadian the rate varies from 1.73%-3.26% per transaction.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
Appendix
Core Back Front Back + Front
Open Back + Open
Front + Open
Network
BlueBamboo
Circle it Up
Flint MTS POS
PocketPOS
YES Bank
Mswipe
MTS
O2
Payleven
pay@mobile
Softspace
Spire/Thyron
Swish
Vantiv
Visalus
Cube
RevCOIN
Adyen
Ezetap
Intuit Gopayment Sage Payments PayAnywere
Citibank
Corduro
GobalBay
GoPago
Groupon
Mobile Pay On Demand
MRL Posnet Revel
KWI Cloud9
NCR
ShopKeep
MRL PaySimple
Posnet Lightspeed
Retail Cloud
Sales Vu
Miura Shuttle
iZettle
Handpoint Mpowa
Payleven
Payfirma Swiffpay Square
PayPal Here
SumUp
Powered By Suppliers Adaptive Payments | Anywhere Commerce | CHARGE Anywhere| creditcall | Fiserv | ID
Tech | Magtek | MRL Posnet | Payworks | ROAM | Swiff
Key – Bold Italics is new to the pyramid as of March 2013
The MPOS Report Context
The MPOS Tracker™ organizes the ecosystem into two broad categories: those merchant-facing
organizations who supply devices to merchants directly and those who “power” those players and
supply them with the MPOS hardware, software, tools and services that helps merchant-facing
organizations meet their customer needs. This, we believe, helps to further establish and define the
playing field in what has become a very active space.
What the MPOS Tracker™ is:
The MPOS Tracker™ is designed to offer an organizing framework for evaluting the many players that
have entered the mobile point of sale (MPOS) sector. For the purposes of the Tracker, we will look at all
mobile devices – mobile phones and tablets - and will profile players who enable commerce via either.
Consider the monthly MPOS Tracker™ as our best attempt to give the payments space a “playbook” on
the MPOS ecosystem and how it is evolving – a sort of “who’s on first” perspective of who’s in it, what
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
their offerings are, and how the market may have evolved month to month. On a quarterly basis, we
will do a “deep dive” into the vendors that play in a specific category.
What the MPOS Tracker™ isn’t:
At least now, this report isn’t a rating or ranking of the players in this space – this feature will be
introduced in Q1 of 2013. It is also probably important to note that we take the information that is
provided to us by the vendors as accurate – we have not done our own due diligence to inform the
placement of the players on the MPOS Pyramid™. We will conduct diligence to support the
rating/ranking feature once introduced.
As we stated in our first report (October 2012), the MPOS ecosystem is moving quickly and this report is
by no means complete – which is why we have chosen to do monthly updates. Further, information
about the players is available in varying degrees of completeness. Details about volumes and shipments
– the information that everyone finds most valuable – is not publicly available. In fact, our big wish is to
publish an aggregate number of MPOS shipments so that we can track how this market moves in more
quantifiable terms. We thank those who have provided us with that information, so far, but would more
so that our report can be complete. We will not publish this information for any individual player but
will only publish an aggregate number on a quarterly basis. If you would like for your numbers to be
added to the total aggregate MPOS Tracker™, please contact us at [email protected].
If you would like to be included in this report and/or would like your information to be updated, please
contact us at [email protected] and we will send you the data sheet required for submission.
Further, if you would if you would like to be included in our ratings and ranking, please indicate this as
well so that we can send along our more detailed questionnaire for you to complete.
Why is MPOS Relevant?
The diffusion of smartphones worldwide has revolutionized the payments industry in a variety of ways.
Mobile phones are being considered (and trialed) in both the retail payments environment and the
acceptance/point of sale environments. “Going mobile” today now means that both customers and
merchants are able to gain tremendous efficiencies at a point of sale that can accommodate the form
factors that consumers use today - the plastic card – and move that point of interaction closer to the
customer. Merchants large and small are able to gain business efficiencies as well as new customers and
sales.
Along the way, card readers have been transformed into tiny devices that plug into the headset jacks of
mobile phones and tablets, turning these powerful IP-enabled computing devices into mobile point of
sale terminals- thus the MPOS acronym. But the power goes well beyond card acceptance anywhere, by
anyone. These mobile point of sale devices leverage existing payments functionality and infrastructure
which means that the chicken and egg issues typically associated with new payments entrants don’t
exist. MPOS card readers enable the acceptance of the plastic cards that consumers carry in their wallets
today and like to use.
Organizing the Mobile Point of Sale Ecosystem | March 2013 Ecosystem Analysis
MPOS may have started life as a way to enable casual sellers and small merchants to accept cards, but it
is quickly moving up the merchant supply chain. MPOS actually started life way back in 2008 – before
Square - in the mobile “field services” space enabling tradespeople and other field service personnel to
deliver their services and generate both an invoice and a payment on site. Square applied this concept
to the micro merchant who was unable to accept anything other than cash or check. Now, Tier One
retailers are turning tablets into cash registers and moving payment and check out to wherever the
consumer happens to be in the store. Clearly, MPOS is reinventing the entire commerce experience for
all types of merchants and consumers.
Quite naturally, given the “perfect storm” of mobile devices, consumers and plastic cards and existing
payments rails, the market has seen an explosion of POS players enter the market. MPOS players can be
divided into two camps: the dozens of players who supply devices to merchants and the universe of
players who “power” those players and provide them with the MPOS hardware, software and enabling
platform functionality needed to meet the needs of their customers. The capabilities of those who
“power” the suppliers range greatly, and as a result, the MPOS offerings in market today exhibit a wide
range of functions from basic payment card acceptance and processing (eg. Groupon Payments) to
enabling a merchant/consumer network (e.g. Square).