At one time, it was easy to be taken aback when you walked into an Apple store to see members of staff manning tablets rather than tills. But the use of mobile point-of-sale (mPOS) devices – which allow staff to take payments on mobile devices – has rapidly shifted from being something of a novelty to being a serious phenomenon in its own right. Which poses the question: what has driven the rise in mPOS solutions?
Certainly a major driving factor in the uptake of mPOS is the fact that the way consumers expect to pay has shifted significantly in the last few decades. “Consumers now expect to be able to pay for everyday goods and services with a credit or debit card,” says Philip McHugh, CEO of Barclaycard Business Solutions, the division responsible for its mPOS solution Barclaycard Anywhere. This may seem self-evident but still a significant number of small businesses miss out on a huge amount of trade by not accepting cards; Barclaycard’s research indicates that SMEs miss out on more than £7bn a year by not having the ability to take cards. “Start-ups and SMEs have needed to respond to this new landscape and update their payment systems in order to remain competitive,” he explains.
Evidently then there is a clear case for small retailers taking card payments but whilst traditional point of sale solutions cater to this, there are several drawbacks. “They’re bulky and expensive,” says Ben Brown, CEO of Shopwave, the iPad POS solution. Traditional card machines tend not only to come at high cost – requiring the payment both of processing fees and line rental, which can be prohibitively expensive for a new retailer just finding its feet – but the technology itself tends to be immovable and inelegant. “You have retailers that are spending loads on aesthetics and they have to have a big black box on every counter,” Brown says.
By contrast, mPOS, through its use of mobile devices and wifi or mobile connectivity, side steps these issues. And this means they can have a significant benefits for businesses that would like to take payments on the go. “Tradespeople are a really interesting market,” says James Frost, chief marketing officer of Worldpay, the payment processing company. A plumber will typically carry out work and then issue an invoice, leaving a hole in their finances whilst they wait for payment; research his company conducted in January last year found that sole traders and micro-businesses were owed up to £2.5bn a year in late payments. “It really affects their cashflow,” he explains. “If you take a card payment the money’s in your bank account usually within three or four days.”
But the increased flexibility of mPOS solutions also makes them perfect for innovative kinds of businesses, which – by their very nature – require an agile approach. “Flexibility is a major factor,” McHugh says. “Accepting payments on the go provides the freedom for SMEs to run their business from any location.” Non-traditional offerings like pop-ups and street-food outlets may not always know what the immediate future will hold. This means they can’t afford to be pinned down by heavy kit or inflexible fees and this makes mPOS the perfect solution.
This increased agility can also help hugely with businesses that are looking to grow, providing a point-of-sale solution that will continue to meet their needs as they expand across multiple locations. “Businesses like pop-ups are actually often owned by people with a lot of experience,” Brown says. “They’re testing a brand that they’re hoping to scale.” Whilst he says a new point of sale solution could require a growing business to make an outlay of almost £5,000, many mPOS solutions will allow businesses to have a more granular approach, scaling up their package more organically in line with their revenues and requirements as they build.
There’s much more to mPOS solutions than payments alone, however, and – as retailers build their offerings – being able to break away from a till can allow staff to be far more reactive to the requirements of customers.
Frost gives the example of assisted shopping; as they’re using mobile devices plugged into the store’s stock system, they can better answer customer queries and process the resulting transactions. “Someone might come over and help you with a query,” he says. “And if they help you find what you want, they can take the payment there and then.” Staff being able to take payments in a more agile manner also can help with queue-busting during busy periods, enabling them to cut customer waiting times and maximise the number of sales made. “That can be really useful, particularly at peak times or during sale periods.”
Given the fact mPOS solutions can also facilitate more interactive customer experiences in other ways. Whilst old-fashioned till systems tend to operate on a fairly closed data ecosystem, mPOS solutions like Shopwave can enable stores to build integrated consumer-facing apps with much more ease. “If it’s a food retailer and they want to build a menu app, they can pull the stock availability data off the point of sale device in real time,” explains Brown. This makes creating more engaging consumer experiences a breeze. And this is one of the real strengths of mPOS solutions. Whilst omni-channel is the retail buzzword du jour, there’s no denying that seamlessly integrating the online and offline worlds is becoming increasingly important. “[mPOS solutions will] ultimately help bridge the gap between the online and offline worlds and provide retailers with a single, end-to-end customer view,” says McHugh.
When members of staff are equipped with devices that are plugged into a retailer’s data ecosystem, it becomes much easier to create a genuine exchange between the online and offline worlds. “An example is if the item that the customer wants isn’t in stock,” Frost says. “Staff can also use that same mPOS device to help the customer order it from the online shop.” This allows online and offline retail, which are often viewed as being in competition, to be much more complementary, providing the consumer a better experience wherever they go.
Evidently mPOS is offering significant benefit to retailers and because of this its uptake seems likely to soar from here on out. “Unless there’s a very good reason, I can’t see this trend not continuing,” says Brown. He points to forecasts from BI Intelligence, the Business Insider research service, that posit that by 2019 nearly 80% of US retailers will have implemented an mPOS solution, something that he feels is hardly surprising. “You’re getting rid of devices that are inflexible and very basic for a multi-functional device that can do everything for one-fifth of the cost,” he concludes. “It really is a no-brainer.”
Case in point
When it’s not easy for customers to get their hands on cash, a business needs a ready alternative. Given Chillilicious, the chilli farm based in rural Fife, spends a lot of time selling its produce at events that tend to be right out in the countryside, making sure it can take card payment on the go has been absolutely vital. “There are no cash machines; there’s not even one you can pop along to,” says Stacey Galfskiy, the business’s co-owner. “As soon as the customer’s spent all their money, if you don’t take card then you’ve lost that sale.”
The chilli grower realised that it had to find a solution that allowed it to process payments wherever it went but more traditional solutions just weren’t suitable. “We looked at the big handheld machines and we decided they were just too expensive,” Galfskiy says. She enrolled the business in some beta trials; after coming across Worldpay Zinc, she found it gave them the mobility they needed without inflexible costs. “We wouldn’t have made any money off the card machine if we taken on the standard ones with the monthly charges,” she says. “But having the mobile solution is worthwhile because it’s just a percentage charge; you’re not finding that you’re out of pocket after the charge comes off.”
Since then Chillilicious has found its mPOS solution helps it up its game across the board. Not only has it given it the extra edge at events but it’s even given it a helping hand on its home turf. “We’re at the stage where we want to localise a little bit more, so we’re opening a tourist area on the farm,” Galfskiy explains. The remoteness of the farm and the lack of accessibility of cash would have previously made this an impossibility but now it is able to sell its produce easily, no matter where it’s based. “The fact that we can actually take payments wherever we are is great,” she says.