Banks and financial institutions globally need to develop mobile point of sale (MPOS) strategies now, as major high street retailers begin to use MPOS solutions to reinvent their in-store shopping experience. This is the view taken by the global bank-driven business association, Mobey Forum, in the second in a series of white papers focusing on the MPOS market. The paper, entitled ‘The MPOS Strategy: Shifting the Balance of Power’, examines the changing market dynamics brought about by disruptive MPOS providers and offers a strategic evaluation framework designed to help banks maintain their position and take advantage of the rapidly evolving MPOS market.
The paper examines how MPOS disrupts the established four-party model (cardholder, merchant, acquirer, issuer) and identifies the potential winners and losers in the marketplace. Pushing beyond the traditional MPOS ‘dongle plus smartphone’ concept, the paper addresses issues surrounding interchange models, payment service provider models, networked commerce and the merchant-customer relationship. The paper then investigates how banks and financial institutions are currently reacting to the influx and utilisation of MPOS solutions, before proposing a structure through which banks and other stakeholders can weigh their strategic options, protect their interests and move to take advantage of the wave of change occurring in this complex environment.
Sirpa Nordlund, Executive Director, Mobey Forum, comments: “MPOS has already led a revolution in customer purchasing convenience by bringing card acceptance to sole traders and small businesses. As the market matures, this ethos is now being applied to much bigger and more mainstream shopping environments. MPOS is providing a midpoint between our physical and digital shopping experiences, enabling us to apply in-store many of the behaviours that have become second nature when shopping online, such as the application of digital loyalty and reward-driven promotions, voucher codes, personalised offers and self service checkouts. Dramatic enabling changes are occurring in point of sale solutions as a result; tablets are coming into play, line-busting sales staff are becoming common-place, even biometric authentication on handsets is being introduced in some solutions. Banks that have chosen a ‘wait and see’ stance on MPOS now need to get serious about evaluating this market. This paper is intended to help them do just that.”
Looking to the future, Nicolas Dinh, Mobey Forum MPOS Workgroup member and Vice President, Business Leader – Mobile Lead (Canada) at MasterCard, adds: “In 2014 we are likely to see alliances form where merchants integrate value added services and launch low-energy Bluetooth-enabled payment zones. The mainstream adoption of ‘smart’ wearables such as glasses and watches is also around the corner, which is likely to simplify mobile payment acceptance even further. Banks have a real opportunity to align their services with these innovations, but they must adopt a strong mindset if they are to maintain their current competitive position in payments and extract value from the market at the same time.”
‘The MPOS Strategy: Shifting the Balance of Power’ is the second deliverable from the newly formed, globally representative MPOS Workgroup, founded and coordinated by Mobey Forum’s North American Chapter. The paper has also benefitted from the contribution of unique and previously unpublished MPOS market research from global management consultants, McKinsey & Co. A variety of leading banks and service providers have also contributed to the paper, including: Bank of America, BAMS, Calman & Co. LLC, Capital One, CIBC, Danske Bank, DNB Bank, Elevon, Fiserv, Gemalto, Infobip, MasterCard, Metaforic, Monitise, Nets , Nordea Oberthur, RBS, SAP, Tieto, US Bank and Visa.