organizing the mobile point of sale ecosystem | april 2013 · this solution enables mobile phones...

Organizing the Mobile Point of Sale Ecosystem | April 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 April 2013 MPOS Tracker™

March was all about data and the ability of mPOS solutions to help merchants of all shapes and sizes

capture and use it in furthering their relationships with customers. This month will focus on data too,

but data about the mPOS sector overall – and it is, well, still an itty, bitty baby as far as retail sales are

concerned. The good news: the sector overall is expected to grow really fast — like 45 percent or more a

year according to industry analysts. The not so good news — its growth is over a teensy base. In 2018,

those same analysts are reporting that mPOS will account

for only about one tenth of one percent of all retail sales.

That small fraction of sales is not all that surprising given

the types of merchants that were the early adopters –

micro-merchants in categories that by and large don’t

really move the needle all that much on overall retail

sales. Many are the small non-card-accepting merchants

in sectors such as personal services that represent smaller

overall retail sales volumes. Even the wholesale

replacement of traditional registers with tablet solutions

is concentrated right now in sectors where volumes are

not that significant. Revenues will rise much faster when

large players begin to ditch their traditional POS solutions

for mPOS solutions – and that will take some time.

A few other things worth noting and emphasizing for April:

Bundled solutions are de rigueur. We first pointed this out in February and that trend is nothing but

continuing. Look for this to move beyond basic solutions that cut across all sectors (like CRM,

analytics, and email receipts) to those that account for specific industry use cases and more

sophisticated requirements (e.g. change orders in real time for service personnel and food delivery)

and business in a box solutions that wrap offers and promotions around platform capabilities,

website and social media integration, issuance and even issuance and banking services.

mPOS without the dongle. What was once differentiating has become a little more mainstream.

Some platforms offer the ability to capture an image of a card (a la Flint Mobile, card.io, and Jumio)

and still get the all-important card present rate. This simplifies the cost for the merchant by

A Monthly Update on the State of the Mobile Point of Sale

Ecosystem

A PYMNTS.com Report Sponsored by ROAM


leveraging technology that all phones have – a built in camera.

Darwin will rule. It is highly unlikely that the market can support all of the many mPOS solutions

that are popping up, and so we can expect to see consolidation over the next year, especially since it

is relatively painless for SMBs to move between solutions (and some have multiple solutions

already). What will be interesting to watch is the extent to which Darwin moves into the traditional

point of sale market. NCR

anticipated the shift away from

the register and introduced NCR

Silver into the sector that is

dominated today by its Radiant

solution. It has chosen to

creatively destruct its own

product rather than risk having it

destroyed by a competitor. What

others chose to do will be an

industry case study that we will

observe in real time.

Gimme a T. Tablets are changing

the mPOS space in a big way and

offering merchants of all sizes an

alternative to the traditional (and

expensive) cash register system.

The big question is the extent to which these solutions can support the applications that larger

merchants, in particular, need to run their establishments. And, whether Apple decides to use the

adoption of tablets by retailers as a way to further embed itself into the mobile payments world

thru software and hardware enhancements that add more utility to them. What is fascinating about

the tablet phenomenon is the extent to which others have used it to innovate – a great example of a

platform in action. Build it, no build a good one that others embrace, and innovation will follow that

the platform owner could have never imagined.

April 2013’s report features five new players to the MPOS Pyramid. The new merchant facing players

are EverPay, iKaaz, JUSP, Kalixia Pro and Spark Pay. In addition, we’ve updated six players from prior

months. They include the following merchant facing players: Adyen, Intuit, iZettle, PayPal and Payleven,

and one supplier, ROAM.

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.

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.


MPOS Player Profiles | New for April 2013

Spark Pay (formerly VeriFone SAIL)

Category Core + Back + Front

When Launched April 18, 2013

#Customers/volume N/A

Focus All Merchants

Location United States

Pricing "Pro Plan" for $9.95 per months plus 1.95 % for swiped, 2.95 % for American

Express transactions.

A la carte - 2.7% per swipe and 3.7% for keyed in transactions

SAIL by Verifone has been repackaged and relaunched by Capital One as Spark Pay. It is being introduced

with two payments options that are able to meet the needs of large and small retailers. Users of Spark

Pay receive access to the tools that may be used for analytics, sales tracking and to send discounts and

offers to customers. With this offering, Capital One joins other financial institutions like Bank of America

in offering a mobile point of sale option to their client base – but in this case, Capital One actually owns

the platform. It will be interesting to see if they white label it to other non-competing players and wrap

other banking services around the offer that could give it an additional pricing advantage.

iKaaz Tap & Pay

Category Core

When Launched April 2013

#Customers/volume n/a

Customer Focus Small Businesses

Geographic Coverage India

Pricing

n/a

This solution enables mobile phones to accept NFC payments and is being distributed in India. iKaaz has

set out to reduce a key barrier to NFC adoption, acceptance and the high cost of terminals. Merchants

are able to buy a NFC reader for under $20 and NFC stickers may be purchased for less than $2 each.

iKaaz reports that Tap & Pay can be used for retail payments, transportation, entertainment and

numerous touch and go points.

iKaaz was launched by former Nokia Money veterans to expand secure, low cost payment acceptance in

territories with low card acceptance. We suppose the play here is to persuade consumers to buy a

sticker on the cheap and then to be able to use it pay. One has to wonder about the merits of NFC

deployment in a country without card/NFC infrastructure outside of the merchants who have NFC

readers, so we shall be watching this one carefully.


EverPay

Category Core

When Launched July 2012


Focus Large Merchants

Location Latin America, South America

Pricing n/a

EverPay is the latest product of Evertech, which offers a range of financial services products including

traditional POS terminals, ATM services, acquiring, card issuing and payment networks. Evertech, which

recently filed an IPO, typically focuses on larger merchants to quickly expand payment acceptance

across major retailers and established companies in Latin and South America. EverPay is often referred

to as the “Square of Latin America” and is available in 19 countries.

JUSP

Category Core

When Launched April 2013


Focus All Merchants

Location Italy

Pricing No monthly fee, 2.7% per transaction

JUSP, which is an acronym for Just Pay, developed a mobile Chip +PIN POS that works solely through the

audio jack and does not require the use of Bluetooth. The device meets all EU and payments groups

regulations enabling acceptance of all credit and debit schemes, including Pagobancomat, the Italian

debit program. JUSP is MasterCard and Visa certified and also accepts Discover.

In the first round of funding, the company raised $6 million, one of the largest first rounds for mobile

payments in Italy.


Kalixa Pro

Category Core + Front + Back

When Launched Beta


Focus Small merchants and solo traders

Location UK and Austria

Pricing n/a

Kalixia Pro is a Chip and PIN enabled mPOS device linked to the Kalixa payments portfolio of services

including issuing and acquiring. A key feature touted by Kalixia is its e-wallet which enables merchants to

manage their money without the costs, risks and complications of traditional small business DDA

accounts. Its business model is based around the belief that bringing merchants into one ecosystem,

they can reduce cost and foster innovation to make business easier to operate and more successful.

Kalixia aims to make accepting and taking payments simple for entrepreneurs, sole traders and

individuals. They process payments for over 300 merchants and provide access to card payments and to

200 alternative payment solutions. The company began in the internal payment department of

bwin.party, an online gambling company.

MPOS Merchant Facing Players | April 2013 Updates

iZettle

Category Core + Open

When Launched August 2011

#Customers/volume 50,000 Merchants

Customer Focus Small merchants in Europe that don’t accept cards

Geographic Coverage Sweden, Denmark, Norway, Finland, the UK, Germany, France and Spain

Pricing

2.75% for MC and Diner’s Club or 2.95% for AMEX

Update: iZettle has entered an agreement with a UK based online trade recommendation services

provider. The two companies are preparing to launch a trial to enable users to accept card payments

through smartphones or tablets. iZettle has also made an agreement with Spanish financial services

provider, Banco Santander, to enable card payment with smartphones and tablets for its customers. In

addition, the company has added a loyalty analytics platform to provide merchants with more detailed


information on transactions. The updated merchant portal will display revenue, top selling products,

transactions, average payment volume and returning customers.

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%

Update: Payleven went live with an updated website and registration process which it claims makes it

easier for merchants to do business with them. Now individuals can sign up for Payleven and start

accepting card payments more quickly and with fewer questions. In addition, the company added multi-

account support so more than one user may accept payments on a reader. Also, the POS system will

integrate with many printer models.

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

Update: Ayden has updated its fee structure. Processing fees now vary 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.

Update: Intuit GoPayment added the “scan card” feature to its offering. Now, users can take advantage

of the card present rate with an image of the card.

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

Update: PayPal forces with joined with eBay-owned Magento to integrate PayPal’s mCommerce and

mobile payments technology with Magento’s e-commerce offering – offering merchants using its mPOS

solutions the opportunity to experience Magento functionality on that platform. An In-Aisle Selling app

offered as part of that platform also hooks PayPal’s Here directly to make a Mangento store into a

“concierge” sales tool to service customers in the isle.

Update to Supplier

ROAM – ROAM launched an updated version of it mobile POS application, ROAMpay X4. The update

offers offline payment acceptance, inventory management, previous purchase recognition and

personalized receipts, advanced security settings and ability to integrate into existing backend systems.


Appendix

Core Back Front Back + Front

Open Back + Open

Front + Open

Network

BlueBamboo

Circle it Up EverPay Flint iKaaz JUSP Mswipe

MTS POS

O2

pay@mobile

Payleven

PocketPOS

Softspace

Spire/Thyron

Swish

Vantiv

Visalus YES Bank

Adyen

Cube

Ezetap

Intuit Gopayment PayAnywere

RevCOIN

Sage Payments

Citibank

Corduro

GlobalBay

GoPago

Groupon

Mobile Pay On Demand

MRL Posnet Revel

Kalixia Pro KWI Cloud9

Lightspeed

NCR

PaySimple

Retail Cloud

Sales Vu ShopKeep Spark Pay

Handpoint iZettle

Miura Shuttle

Mpowa

Payleven

Payfirma Swiffpay Square

PayPal Here

SumUp

Key – Bold Italics is new to the pyramid as of April 2013

Mobile Readers Costs

Player Pricing

Adyen €10/month Processing fee varies between 1.60% - 3.95%

BlueBamboo n/a

Circle It Up n/a

Citibank n/a

Cloud9 n/a

Corduro Varies, 2.5% per swipe and manual is 2.9% + $.20

Cube

2.5% per swipe or 3.5% per key-in card information or integration into existing merchant account

EverPay n/a

Ezetap Hardware Rs. 1500

Flint 1.95% - 2.95% + $0.20/charge


GlobalBay n/a

GoPago 2.85% plus $0.10 on transactions under $12

Groupon Swiped 1.8% + $0.15 per transaction, Keyed 2.3% plus $0.15 per transaction

Handpoint 2.65% per transaction and £9.99 or 1990 ISK monthly fee

iKaaz n/a

Intuit GoPayment

$12.95/month and 1.75% swipe and 2.75% entered or 2.75% swipe, 3.75% keyed without monthly fee

iZettle 2.75% for MC and Diner’s Club or 2.95% for AMEX

JUSP n/a

Kalixia Pro n/a

KWI n/a

Lightspeed $1,098-$3,875 per program for one license

Miura Shuttle n.a

Mobile Pay On Demand 2.7%/swipe or 3.5% + $.15 per keyed in

mPowa 25% or minimum charge $0.40 or £0.25 or €0.30. Or 2.95%, depending on country

MRL Posnet n/a

Mswipe n/a

MTS POS Between Rs.200 – Rs.300 per month

NCR Silver

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)

o2 £20 for the POS and 2.75%/transaction

pay@mobile n/a

PayAnywhere 2.69%/swipe

Payfirma

$25 set up fee + $10 monthly fee + 1.99%-2.92% + $ .25 / swipe. Minimum monthly fee $40 for processing less than $2,800/month.

Payleven Cost of reader (£89 or 99€) + 2.75%/transaction

PayPal Here 2.7% transaction fee, with no monthly fee. Non-swipes up to 3.5%, with a $ 0.15 fee

PaySimple $34.95/month and 2.29% + $0.29 / transaction

PocketPOS n/a

Retail Cloud n/a

mailto:pay@mobile


RevCOIN 2.55% per transaction or 3.55% +$.15 when card is not present

Revel n/a

Sage Payments n/a

Sales Vu 2.7% in the US and between 1.73% - 3.26% in Canada

ShopKeep $49 for one register and $98 for two registers per month

Softspace n/a

Spark Pay

Pro Plan $9.95/month plus 1.95 % for swiped, 2.95 % for American Express transactions. A la carte - 2.7% per swipe and 3.7% for keyed in transactions

Spire/Thyron n/a

Square $275/month or 2.75% per swipe

SumUp 2.75% per transaction

Swiffpay Vary based on country and type of business

Swish HK$498 for reader and 2.99% per transaction

Vantiv n/a

YES Bank Rs 2,000 and Rs 250-500 per month

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

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.

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.

mailto:[email protected]

mailto:[email protected]


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).

organizing the mobile point of sale ecosystem | april 2013 · this solution enables mobile phones...

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