[Customer pats down pockets] "Oh, sorry – I don’t have any cash on me”.
This will be a familiar experience for many – research from WorldPay earlier this year revealed that 20% of UK consumers have abandoned a purchase because a small business or sole trader has been unable to accept a card for payment. This is perhaps not surprising – traditional fixed point-of-sale terminals (POS) which depend solely on secure network connectivity are not practical for businesses that need to accept payments on the move. In addition to restrictions around mobility and flexibility, the prohibitive cost and complexity of complying with the comprehensive payment card industry security requirements creates a very high barrier to traditional card acceptance by the micro merchant community.
Mobile card readers can change all this. By working in conjunction with smartphones or tablets to create a secure mobile point-of-sale (mPOS) card acceptance facility, a whole new range of businesses can now accept card payments, generating additional revenue for payment service providers (PSPs) through increased transaction volumes. Furthermore, businesses which already accept card payments, such as high street stores or restaurants, can improve customer experience by adding the mPOS capability to complement their existing in-store card acceptance terminals.
Needless to say, payment card acceptance depends on a large and complex system with multiple components - various players have to come together to make the mPOS value chain work. The manufacturers of the mobile card readers provide the front end component. The PSPs provide the essential gateway link between the merchant and the acquiring network, shielding the merchant from technical complexity. Then there are the companies that provide the underlying security infrastructure. Indeed, encryption is the technology enabler for mPOS, lying at the very heart of the ability to secure payment data as is passes through untrusted devices, apps and networks. With data encrypted at the point of capture (at the card reader), the merchant smart phone or tablet is out of scope for security audits, allowing PSPs to on-board new merchants at minimal cost, as well as allowing merchants much greater freedom to customize the crucial user interface.
To help simplify the integration requirements for PSPs and enable merchants to have greater flexibility in choosing the best mobile card reader to suit their needs, Thales is actively growing its proven mPOS partner ecosystem. The set of integrations enables PSPs to get to market more quickly by relying on the trusted and globally-recognised hardware security module – payShield 9000 - which already secures over 80% of the world’s payments and is the latest generation of Thales HSMs that have been used extensively by the acquiring market for over 25 years.
Critically, the ecosystem gives PSPs choice. By relying on the Thales secure back-end, PSPs can offer merchants multiple front-ends without driving up the cost of their transaction processing infrastructure. This means that merchants can utilize the device that works best for their particular environment and consumers enjoy greater flexibility around how they pay. Everyone wins.
mPOS truly has the power to expand card acceptance, leveraging strong security while reducing complexity and lowering costs for the micro merchant community. It supports innovation as well as opening up a new and lucrative market for PSPs. Leading mobile card reader providers including MagTek, Miura and Spire as well as PSPs such as CreditCall are already participating in the ecosystem. We will be announcing more partners in the coming months so watch this space!
You can learn more about the Thales mPOS ecosystem in our whitepaper MPOS Secure Mobile Card Acceptance: more cards, more volume, less cash