Why have apps at the Point-Of-Interaction?

The point of sale (POS) payment terminal has been a mainstay of merchant countertops with little change in functionality for decades. Now merchant payment solution providers, hardware vendors, and app developers are all focused on revolutionizing and bringing more value to the point of sale to turn it into a point of interaction (POI) for the merchant.

For small and medium sized (SMB) merchants the point of interaction is the focal point of their business where they face their customers to take orders, deliver goods/services and take payments. The introduction of all-in-one payment solutions on smart point of sale devices, or smart POS, provides these merchants with access to customer-facing apps and back-office productivity tools that allow them to devote more time and attention to consumers. Ultimately, these solutions create greater satisfaction for customers whose requests can be satisfied without leaving the shop floor.

As they seek to compete with larger retailers and ecommerce, brick and mortar merchants need more tools at their fingertips, creating demand for innovation and new opportunities for solution providers and app developers.

New role for merchant payment solution providers

The availability of these all-in-one payment solutions provides merchant payment solution providers, such as merchant banks, acquirers, Independent Sales Organizations (ISOs) and Value-Added-Resellers (VARs), with the ability to deliver more value-added services that generate new revenue streams, forge customer stability, and transform into a new role as trusted advisors to merchants. They can advise and pull together suites of apps and services that derive greater value out of countertop payment solutions.

For acquirers who have long struggled with merchant churn eroding margins, Smart POS solutions and apps provide an opportunity to create long lasting partnerships with their merchants. Instead of competing with commodity hardware, they can deliver an adaptable platform that provides choice and flexibility.

Now apps can scale with merchants; apps can be added and deleted according to merchant type, needs, desires and experiences. New hardware can be introduced to run existing apps if the merchant wishes a new form factor or wants to use its smart POS solution in a new venue. Upgrading is a relatively simple software action, rather than the brutal rip and replace operation of legacy payment devices.

Instead of competing to offer the lowest price, acquirers can leverage their street-savvy and merchant interactions to curate suites of apps that provide real value to their customers. Better yet, this creates an additional recurring revenue stream for acquirers who get a slice of the revenue going to app developers and service providers.

Target-rich market for app developers

App developers gain access to a new channel of distribution, with solution providers selling their apps into previously hard-to-reach merchant segments, including general retail, food and beverage, travel, and professional services.

SMB merchants represent a tough market for app developers. Unlike consumers eager to test out the latest smartphone app, merchants have little time and resources to spare for experimenting with apps that may or may not deliver what they want. Research and training of staff into different software is time consuming and expensive.

There is a plethora of apps available to merchants but a lack of a centralised database informing them which are the best apps for their merchant type that best tackles their specific pain points. Unless the developer can go door-to-door, their target merchants may never even realize a particular app is available.

For app developers wanting to circumvent this problem and integrate into some of the bigger POS names, it can also be costly and time consuming to integrate into every solution out there. New standards published in 2018, such as AppFlow SDK, mean they don’t have to worry about integrating with other apps at the POI as open platforms provide an ecosystem that orchestrates diverse apps in a seamless transaction stream. For example, a consumer can order a product, pay for it, arrange delivery, and cash in loyalty points, all in one integrated process.

Transforming POS into the POI

Integrating payments with productivity and business app means it is possible for data from these sources to be visible on a single digital dashboard. A single analytic dashboard provides merchants with instant overview of transactions data, inventory status, resources such as time & attendance to make informed business decisions.

Merchants can cost-effectively tap into customer relationship management apps that integrate marketing and loyalty features, utilize social media, email, and web outreach, and find out what promotions and coupons are most effective.

Usually, this level of functionality has only been available to large retailers who can afford large IT systems or expensive outsourcing services, along with analysts able to manipulate constant streams of data. With smart POS solutions, solution providers can equip merchants with apps to process the data and provide reports that are easy to understand and help them take action to generate profits.

Even small Mom & Pop convenience stores can tap into these reports to gain insight into their sales numbers, pinpoint their most valuable customers and most productive sales clerks, and learn what products are best sellers at different times of day or season. This takes the guess work out of what and when to promote and entice consumers with sales and specials.

Smart POS can solve pain points for merchants, acquirers and developers and are a scalable way of improving brick and mortar commerce. The offerings need to be tailored to specific merchant needs and the go-to-market solution needs to be well thought out but without doubt providing apps at the POI is the way forward.

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