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Mobility in Retail

Mobile Point of Sale: Are you buying into the hype?

The cash register is an endangered species. For some, it’s already dead and buried, laid to rest by a cheaper and more advanced technology – Mobile Point of Sale.

Mobile Point of Sale (mPOS) is nothing new. Some of its earliest adopters, Apple and The Home Depot, have been using mPOS systems for almost five years now. From 2011 to 2012, the mPOS market took off. mPOS terminals operating worldwide increased 111 percent, from 4.5 million to 9.5 million. And that’s just the beginning. By 2017, the number is expected to reach 38 million.

In 2011, several large retailers began testing mPOS systems. The Home Depot deployed 30,000 mPOS devices in October 2010, and by the end of January the next year, the retailer had neared one million mPOS transactions, according to Retail Info Systems News.

Around the same time, Urban Outfitters began piloting their own mPOS system. For 1/5th the price, the company soon began replacing cash registers with iPads. According to Business Insider, as of September 2012, the company has not bought a single cash register.

But don’t bank on the extinction of the cash register. Most retailers view it as a supplement. Over the course of the next three years, 85 percent of larger retailers plan to adopt mPOS systems as an additional checkout option, according to IHL Group’s report, “Mobile POS: Hype to Reality.”

Smaller retailers are taking advantage of the technology as well. Tablets and smartphones are processing transactions in boutiques, food trucks and corner coffee shops around the world. mPOS systems are popular amongst small business owners because they require a smaller investment up front and are easier to repair than cash registers.

Business is booming, and perhaps the biggest winners of all are the ones that made it possible – the mPOS vendors. Retailers are pouring resources into mobility to keep pace with the accelerating trend. In 2013, mPOS equipment, hardware and software spending is expected to total more than $2 billion in North America alone, according to Forbes.

Yet there are security concerns with implementing mPOS. Many of these concerns can be addressed through Mobile Device Management (MDM). Mobile devices are not designed to be cash registers. They are designed to do more. But therein lies the problem. Because mobile devices are not solely dedicated to processing transactions, security threats can come from a variety of different angles. One of the main threats that comes with a mobile and more agile system is the theft or loss of the device itself. But under AirWatch management, retailers can leverage compliance policies that require strong password or multi-factor authentication. Ensuring these mPOS devices never fall into malicious hands is in large part the responsibility of the retailer – though MDM can be used to help amplify security measures.

Other threats can be directly eradicated by MDM. Jailbroken devices are subject to malware, such as key logging for unauthorized PIN collection – with AirWatch, devices are routinely queried to protect against this. Other potential threats come in the form of unnecessary device functions, simple passwords, unauthorized applications and improper disposal of mPOS devices – all of which can be prevented with AirWatch MDM. With MDM, device functionality can be limited to only the most necessary functions, applications can be white or blacklisted, compliance policies can be set to require complex alphanumeric device or application passwords and remote device wipes can be performed on lost or retired devices. Also, with AirWatch App Wrapping technology or through integration with the AirWatch Software Development Kit (SDK), retailers can ensure that custom built or third-party POS applications are locked down.

Still, even amidst security and privacy concerns, shoppers are beginning to warm up to mobile transactions.  I Love Velvet’s “Consumer Mobile Point-of-Sale Attitudes Report” found that more than 45 percent of consumers believe mPOS makes a retailer “tech savvy” and more than half believe the cash register is a dying breed – though consumers’ most common concern is security. For this reason, many retailers will likely adopt a hybrid model, consisting of both mPOS systems and cash registers.

Both mPOS vendors and retailers must gain the trust of the consumers, and eventually if that trust is gained, consumers will begin to embrace mPOS and accept change – but not the kind that goes in their pockets.

Learn more about integrated mobile retail solutions in the AirWatch Marketplace.

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Scott Solomon

Scott Solomon

Scott Solomon is an Atlanta native and University of Georgia graduate who has spent the past six years studying technology, though his passion for the subject has been lifelong.

Comment

  1. Gabe

    Mobile POS is a Great and convenient check out systems but with many issues, such as dissent equipment costs are high and since it is mobile it is need to be replaced more often. Security is the major issue with Credit Card processing over mobile devices,.
    That’s why I think is still early for large companies.

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