The following has been re-posted from Convenience Store Decisions. The original article can be found here.
Hand-held devices aren’t just convenient; they are the secured cash registers of the future.
By Ed Collupy
Looking back, I always wanted the opportunity to checkout a customer using a brass cash register, not just seeing and admiring them like a work of art. My cashiering days started on an NCR Class 5 mechanical cash register. And my first full-time retailing job was to support ECR’s (Electronic Cash Registers) that eventually would be upgraded with early versions of barcode scanners and then became known as point of sale (POS) systems with a weakly secured dial-up connection.
Fast forward to today, and art has taken a back seat to the science of the “cash register” so much so that technology is being implemented and refined where I can become a cashier again. Except this time there will be no cash or a register – instead as a customer/cashier I’ll be using my mobile device with my payment card of choice inside a retailer’s app or my mobile wallet to checkout.
POS systems aren’t headed to the antique shop, rather they are becoming united platforms with mobile and other behind the scenes functionality. Continued integration efforts allow new ways to checkout, often bypassing legacy infrastructure and weaker forms of data security, such as ZipLine’s Private Label Debit (via ACH) mobile transactions that don’t rely on the POS system’s traditional payment card transaction routing to acquirers/switches or PINPad hardware.
Many of the mobile pay at the pump transactions in the marketplace today occur using Conexxus standards that, amongst other things, provide for an above site authentication transaction that changes the role of the POS system at the store, according to Danilo Portal, chief innovation officer at ZipLine. The work of the Conexxus Mobile Working Group, with a cross-section of retailers, solution providers and fintech companies continues to advance their work establishing and expanding usable standards to ensure solid integration that support retailers. They have under consideration a number of proposed standard updates including, but not limited to, integrated POS functionality such as split pay with loyalty as a tender and remote ordering of c-store items.
What’s more, EuroPay MasterCard and Visa (EMV) is pushing the decoupling of payments from the POS by separating the PINPad from the in-store POS system and forecourt dispensers. With this more open architecture it will enable further, simpler, and more secured integration of mobile capabilities over the historically closed-loop POS systems the petro/convenience industry has been using.
The Payment Card Industry (PCI) Security Standards Council (SSC) has been attentive to the migration to checkout payments on mobile devices. They announced earlier this year that they had established a new security standard having to do with PINs. Specifically, software-based PIN entry with off-the-shelf devices, including the merchant’s consumer mobile devices including smartphones and tablets. Significant to this announcement is the council’s shift from security reliant on a physical hardware device to “a new standard that allows for an alternative approach to secure PIN entry by isolating the PIN from other data and using a new robust set of security controls,” according to Troy Leach, PCI SSC chief technology officer.
Data security doesn’t come easy; it is challenging and requires hard work to stay ahead of threats. Mandates, like EMV, and certifications, like the PCI Data Security Standards help in achieving some level of security but it doesn’t mean you are secure – certifications and security are a false equivalent. Approaching the implementation of mandates and certifications with a view that it is a starting point rather than endpoint in security will help to ensure a more successful program.
Beyond Traditional POS
POS industry veteran, Stephen Rogers, believes mobile is “a big concept that can mean many different things based on your perspective.” Going beyond traditional point of sale functionality, he points to mobile customer experiences that will help reinforce the retailer’s brand – ordering food ahead to be picked up or delivered, notification and redemption of a coupon or special offer, to pay using NFC (near field communications) capabilities of the mobile and at-site devices. But mobile doesn’t stop there.
Rogers looks from an operations perspective to mobile appliances that can help with line-busting, evaluating merchandise and planogram setup, executing operational checklists and tasks, providing training programs, or improving customer interaction on the sales floor at, perhaps, the coffee station during the morning rush.
My colleague at W. Capra, Tim Radway, recently posted to www.capraplus.com, that current programs and customer experiences need to be better than they are for mobile customers. He wrote, “Your mobile program is NOT a standalone project, and as such, it needs to have a cohesive plan to match that of your current organization…. Your payment methodologies and security in place need to match your current consumer expectations.”
Spinx, an early mobile adopter based in Greenville, S.C. with over 80 stores, provides customers with an (Automated Clearing House) ACH-based mobile payment with an in-app choice to email a receipt, according to Luis Ackerman, vice president technology. With the increasing movement toward an electronic, interconnected and mobile infrastructure, it’s critical that electronic payments work safely and efficiently for all users.
According to the Electronic Payments Association, the ACH network currently enables a huge volume of payments to be handled in the U.S. By using batch processing and a store-and-forward system, this network moves an astounding $43 trillion and 25 billion electronic financial transactions each year.
Ackerman imagines that the future of mobile platforms in the c-store industry will include capabilities that go beyond POS systems, such as geofencing that captures customer traffic patterns, interactive gamification, in-app wallets to support all types of payments and further integration with the POS.
Based in California’s Silicon Valley, the Rotten Robbie convenience chain offers many digital experiences on its mobile platform that are not easily delivered on c-store POS systems, such as digital coupon offers, social media interaction, integration with tobacco company offers and mobile payment at the pump.
Kim Kauer, digital marketing manager for the 34-store chain, said mobile is “changing quickly,” and there is still room for a more frictionless mobile transaction. Kauer envisions biometrics—thumbprint or facial recognition available on mobile devices today—replacing PIN entry for data security on a payment transaction and POS/mobile integration to support further marketing offers she has planned.
Mobile implementations are not without POS and other technology investments. Spinx decided early on to invest in WiFi connectivity at its sites as a step to drive mobile adoption. Rotten Robbie is investing in new barcode scanners to ensure readability of codes presented on mobile devices. Others are ensuring mobile project budgets allocate monies and resources to propagate security including developing and executing a sound strategy that ensures mobile and security are approached as a unified initiative.
As touchscreen POS systems have made things easier for cashiers to learn, Ackerman and Kauer indicated their cashier training has expanded beyond the POS system to their mobile apps.
Spinx has produced a combined mobile and loyalty instructional video. At Rotten Robbie, in addition to the training that is being updated with inside the store mobile payments on the horizon, they encourage their cashiers to use the mobile app themselves believing it’s a big help to them to “know the process.”
With mobile technology breakthroughs and its simplicity that allow me to be a cashier again perhaps there will be a checkout app that integrates the art of a brass cash register.
Ed Collupy, executive consultant at W. Capra Consulting Group can be reached at [email protected] and be sure to visit www.capraplus.com for more retail technology and business insights. Collupy has IT leadership and business team experience providing strategic, operational, and project leadership to retailers, emerging businesses, and technology companies.