Large digital companies are revolutionizing the information society. Thanks to the global nature of the Internet and standardization, they offer shopping experiences with value-added solutions in many cases at no apparent cost, a situation unprecedented in our history. We have barely started the digital transformation and the era of artificial intelligence for humanity and in this scenario, the success of traditional payment networks has the great challenge of transforming itself, responding to this equation: “Service with technology, innovation and talent ”.
Means of payment: an urgent renewal
Convenience and security are a fundamental pillar in any means of payment, from the days of bartering as a way of exchanging goods and services to the introduction of the fiduciary system or the appearance of credit cards at the beginning of the 20th century. The cards, initially conceived to offer preferential treatment and credit lines free of charge to select customers in their establishments, have evolved to their massive use through Point of Sale Terminals (hereinafter, payment POS terminals), which broke into the market in the 1980s.
Since then, payment POS terminals have evolved in Spain in accordance with technological and regulatory requirements, but with insufficient operations to respond to the explicit and implicit needs demanded by merchants and cardholders.
These shortcomings have become opportunities for those companies that offer differentiation and a future. It is urgent to react to revitalize a normalized market where “coffee for all” is used as the recipe to obtain savings in operating costs, while technological capabilities that cloud the threats and opportunities for digitization to also reach payment networks are wasted .
Despite the still dominant position of these networks, payment POS terminals are today devices with underutilized capabilities, capable of notably improving the payment experience and generating induced business.
Redesigning the user interface, resembling that of the smartphone as a clear success story, with a renewed software architecture to gain agility, exclusivity and independence from hardware, abandoning the trap of basic and general design, are fundamental improvements. In this way we will satisfy the needs of businesses instead of focusing them on a single system or device. They will be allowed to select terminals and applications under a business model based on “revenue share” that will win back the consumer and build loyalty.
Towards a new business model
Providing a unique experience that meets the present and future needs of merchants (and cardholders) means offering them high-value, personalized and segmented solutions that help them sell more and better. Some examples such as dividing the sales invoice, requesting a taxi, issuing a tax invoice, associating insurance to the purchased product, reserving a table, managing tips, discounts or gifts, buying a transport pass, recharging a prepaid mobile, connecting with the box, offering presence control, online reports, … are already feasible.
The end of the aforementioned “coffee for everyone” will motivate the birth of its own ecosystem, based on a Marketplace of the acquiring entity, which will create loyalty in a personalized way for each client through products that are familiar to them due to their appearance and usability.
It is time to benefit from the price reduction and the flexibility offered by POS terminals with open architectures, Android and Linux, for the co-creation of business models that provide new sources of income. Allowing third parties to develop value-added applications (with or without payment usage) and offer them to merchants (free or paid) in your Marketplace ecosystem is the first step.
We are on the verge of a transformation of the payment network business, where it will no longer be so important how much the merchant pays for the POS or for the transaction to the acquiring bank, but how much the merchant will earn for having a POS or another depending on the added value that it provides. Whoever manages to transform this model will dominate the sector.