Terminal makers promise "future proof" products for merchants

Terminal makers promise "future proof" products for merchants

Mobile payments. Chip-and-PIN. Portable registers. With payment technology in constant flux, making sure your terminals can keep up can be a challenge -- and expensive. Any point-of-service (POS) terminal that you buy or lease in the next few years could become obsolete with the introduction of newer payment technologies.

In response, some terminal makers are starting to tout their terminals as "future proof," meaning they'll be capable of accepting any new type of payment technology that comes along.

Anticipated terminal turnover
Terminal providers know that there are several reasons merchants are likely to be shopping for new equipment over the next few years. The most compelling is the adoption of EMV technology by the major credit card companies. Visa, MasterCard, Discover and American Express have all announced that by October 2015, merchants must have POS terminals that can process EMV transactions (and make use of EMV's powerful encryption capabilities). If they don't upgrade to those terminals, merchants will be held liable for the fraudulent use of their customers' credit cards.

But merchants are also being told that consumers want to be able to pay via cellphone (through mobile wallet apps like Google Wallet or PayPal Here), or through contactless payments made with near field communication (NFC) technology embedded in their credit cards. In addition, merchants may want to be able to integrate mobile payment software and systems (like VeriFone's SAIL or Square) into their terminal mix. 

Terminals scramble to adapt
In response to these demands, terminal providers are promoting equipment that claim to adapt to new payment methods.  

Chase Paymentech dubbed its new product the "Future Proof" terminal.

"As emerging payment options gain adoption in the U.S., merchants are looking to make the customer check-out process as easy and safe as possible," said Mike Duffy, president of Chase Paymentech, in a statement. "The Future Proof terminal is a one-stop solution for merchants to keep accepting today's forms of payment and prepare for new consumer payment preferences on the horizon."

The Future Proof terminal allows merchants to handle traditional magnetic-stripe credit cards as well as EMV-chip cards that support both PIN and signature transactions. It also supports contactless payments to keep checkout lines moving faster and mobile wallet apps.

The terminals are manufactured by Ingenico, but work only with Chase's processing services, since they are loaded with that company's proprietary software.

Meanwhile, Verifone is also preparing for future payment possibilities. All the terminals it has installed since January 2012 have NFC capabilities, and these cost 10 percent to 30 percent more than non-NFC terminals, according to The New York Times. It also offers terminals with EMV capabilities.

Verifone also boasts future-proof data security. New payment technologies introduce a host of security questions and requirements. The terminal a merchant uses must therefore be able to securely encrypt card data, whether the payment is made via magnetic stripe or a newer technology. Its VeriShield Total Protect data security  system, Verifone promises, can handle magnetic stripe, EMV and contactless payments.

Another player in the future-proofing game: Merchant Warehouse, a company specializing in software for payment systems. The company introduced its "agnostic" Genius platform, which can be integrated into any POS system, regardless of device or operating system. 

Like Verifone and Chase, Merchant Warehouse has also been throwing around the "future proof" label. And it claims that Genius can "integrate every conceivable transaction technology, payment and type and customer engagement program" -- including  NFC, EMV, QR codes and mobile payments, as well as loyalty, gift and reward programs.

An uncertain future
In addition to manufacturing future-proof terminals, payment device makers must also prepare for a future in which terminals might not even exist. The likes of Square, PayPal and Google are already chipping away at traditional terminals' dominance with dongles, portable register apps and other types of mobile card readers.

In response, Verifone recently announced its SAIL payment platform, which includes a card reader and mobile app that will allow merchants to accept credit card transactions without the use of a terminal.

Ingenico has developed products like the iSMP, which converts an iPod touch or an iPhone into an EMV wireless terminal that can accept magnetic stripe, EMV, wireless and barcode payment information.

Equinox Payments has taken a different route, deciding to work with third-party developers to ensure that the various dongles and card readers are compatible with its processing systems.

Bracing for the future
With so many applications and technologies vying for relevance, it's not clear which of the many new payment technologies will survive long term. Some experts are even predicting that by the time merchants update to EMV, the technology will already be outdated.

Terminals that claim to be future-proof therefore offer an intriguing solution for merchants. Rather than investing in a single direction for their POS terminals, they can select a terminal that promises to go many directions at once.

Published: August 3,2023