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OCTOBER 2015 | A VSR whiTEpApER

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oint of sale has looked the same, and and data safe and serve basic customer needs within functioned largely in the same way, its own proprietary ecosystem. New form factors, for decades. But that’s all changing as operating systems and reliable high speed Internet digital innovation rapidly transforms connectivity mean POS can be freed of its tethers, Ptechnical capabilities and in turn, both physically and virtually. consumer expectations. Mobile devices now deliver unprecedented power and access to information, Today, all of the power of a traditional big iron or putting consumers squarely in the driver’s seat in PC-based POS system fi ts comfortably into devices choosing how, when, where and what to buy, and a fraction of their size. But making that streamlined at what price. They expect the businesses they form factor work at the POS has been cumbersome, patron-ize to be at least as technically capable as until now. New advancements are transforming the they are. tablet and similar devices into highly functional POS systems that off er all of the capabilities of traditional Th e digital revolution also enables new approaches POS, and then some, without complex integration to POS architecture. No longer must the POS device tasks, unsightly cabling, closed computing environ- sit anchored to one spot, requiring local access to ments, PCI compliance or high costs. all of the data it needs to process transactions, keep money

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FiTTing ThE SPAcE: EVolVing PoS ForM “Changes in consumer shopping be- FAcTor havior and the advent of digital technology have radically changed the Traditional POS terminals are rapidly very nature of the point of sale (POS),” losing ground to tablet-based solu- Boston Retail Partners says in its 2015 tions. Tablets are typically classifi ed as POS/Customer Engagement Survey. mobile POS in industry research, but “Instead of a simple transaction device, they can actually be used as stream- the POS now needs to serve as the link lined countertop devices, as portable to customer information, shopping his- devices, or rapidly be switched from tory and purchasing behavior across all one to the other as the need arises. IHL channels. Unfortunately, many retailers Research projects a 320% increase in still try to utilize the same POS system shipments of mobile POS from 2013 from ten or even fi ft een years ago. Th is through 2017, according to its report, oft en leads to associate and customer Mobile POS: Hype to Reality. SMBs are frustration because of slow transac- leading the way: the report found just tions, lack of information available to 15% of mobile POS (mPOS) installs are associates and potentially increased in enterprise-sized companies, but by theft and fraud.” 2018 they are projected to account for 38% of POS installs. 451 Research pre- Older POS systems come with high dicts a 32% compound annual growth maintenance costs and technical limi- rate for mPOS through 2019. tations and also consume valuable counter space. As fi xed position de- Solution providers are also seeing this vices, they cannot be used to bring trend. In VSR’s 2015 POS Study, mobile the POS to the customer. Th e soft ware POS was said to be the number three architecture designed to run on these driver of new POS investments. Add- devices oft en uses payment processing ing mobile POS (49%) was the second soft ware that places the entire device in most cited reason for buyers upgrading scope for PCI compliance, adding costs POS, aft er PCI compliance. and management burden to users. And older, purpose-built POS devices oft en lack the connectivity and browser ca- “Now we see options like pability needed to access cloud-based PowaPOS that bring the applications for real-time customer and inventory data in support of robust peripheral functionality marketing and omnichannel retailing. with a unique, sleek, countertop design which Tablets overcome these limitations because they are built highly user friendly complements the evolving, and access the Internet. Tablets not only robust features of tablet lend a cool factor, but reduce training time because the interfaces are familiar solutions we see in the and intuitive — a critical factor in re- market today.” tail and restaurants, where annual staff turnover can top 300%. Tablet POS can — mattheW inan, direCtor of be set up quickly, making it ideal for BUsiness deVeloPment and sales oPerations, e-naBler pop-ups and mobile businesses in addition to storefronts. Most new tablet- based POS systems off er subscription- 2

vsr_Powa_wp_1015_v3.indd 2 9/10/15 3:18 PM “With PowaPOS, you slide a tablet in there and it all goes well together. based, hosted POS, considerably lowering the barrier It doesn’t sound like a to entry for POS users of all sizes. huge thing, but it is when The recently published VSR POS Study found that you’re an integrator you’re 41% of solution providers agree that the future of POS lies in SaaS/Cloud/On-demand delivery of POS dealing with all those with in-store server back-up, and 49% foresee a hy- pieces and trying to make brid POS platform and e-commerce platform. it look decent.”

Resellers also report widespread enthusiasm for tab- — Chester Ritchie, US Senior Vice let POS among their customers. SMBs lead the way, President, Worldpay but enterprise acceptance is growing.

“There is a shift forming within the POS industry as retailers modify their thinking from the implementa- tablet itself. Now we see options like PowaPOS that tion of a traditional POS system lasting ten to twelve bring the peripheral functionality with a unique, years, to other options such as mobile POS where less sleek, countertop design which complements the costly technology is not expected to last as long, al- evolving, robust features of tablet solutions we see in lowing more flexibility within the retailer’s environ- the market today.” ment,” Boston Retail Partner’s 2015 POS/Customer Engagement Survey also found. This innovation fills a market gap between traditional all-in-one POS terminals and lightweight tablets Productizing the Tablet surrounded by a jumble of POS peripherals. It com- The tablet’s familiar interface and streamlined form bines the former’s rugged, purpose-built design with factor have been drivers for use at POS, but until now the latter’s modern, connected platform: transforming a tablet into a fully functional POS device has added bulk back into the equation. A tablet • A swivel stand that not only holds a removable needs a dock to place it at the right height and angle off-the-shelf tablet, but also houses a receipt for countertop use — a dock that often makes it more printer, Bluetooth bar code reader and PIN pad difficult to use the tablet as a mobile POS device. in an elegant, streamlined form factor. Turning a tablet into a POS station also requires the • A single power cable to support all of these plus addition of a card reader, a cash drawer, a bar code the cash drawer. scanner, a printer, and sometimes a customer display, • A vertical footprint that minimizes use of valu- all competing for the limited ports available on most able counter space. tablet models if they are not wirelessly enabled — • Plug and play functionality that works right out and each requiring a separate integration by the soft- of the box. ware developer for each operating system used. The mass of cables and peripherals significantly detracts Such innovation enables ISVs and solution providers from the streamlined look and reduced footprint that to present a professional, ruggedized POS product initially attracted buyers. that combines the appeal of a tablet with the utility of a well-designed all-in-one form factor. These obstacles not only defeat some of the tablet’s inherent benefits, but add cost and time to POS set- “We’re finally seeing someone get all-in-one right,” up — a significant issue for SMBs. says Jason Seed, president of Kounta USA, which develops cloud-based tablet and phone POS software. “In earlier days there were limited options in “PowaPOS got it right because of the tablet. That stands and enclosures for tablets,” says Matthew changed the game. For the first time we saw a really Inan, director of business development and sales powerful all-in-one with a single power supply that operations for e-Nabler, which develops eMobilePOS cleaned up the desktop and made it much more pre- software. “They simply enclosed and housed the sentable than the old fashioned POS environment.” 3

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“If you compare the PowaPOS solution platform of choice for POS. versus the solutions out there in the marketplace, they kind of look kludgy “Tablets are easy, familiar and not over- and pieced together because they are,” bearing,” says Justin Guinn, market re- says Chester Ritchie, US senior vice search associate for Soft ware Advice. president for payment processor World- “Some PC-based POS can look a little pay. “With PowaPOS, you slide a tablet daunting. We think we will start to see in there and it all goes well together. It more and more industries using tablet doesn’t sound like a huge thing, but it is and phone-based POS.” when you’re an integrator you’re dealing with all those pieces and trying to Across the spectrum, the market is make it look decent. It’s a big deal to the turning aggressively toward tablet and merchant because that’s where they’re mobile POS. dealing with the customer. Th ey spend a lot of money on the internal designs SiMPliciTy FiTS: of their stores, so they don’t want some EASiEr lEgAcy-To- kludgy piece of hardware sitting there.” TAblET MigrATion In Boston Retail Partners’ survey, which Early on, mobile/tablet POS solutions is dominated by chain retailers, 63% of presented several challenges to both participants report plans to increase in- POS buyers and the channel: vestment in mobile POS by 2016 and • Hosted delivery and direct sales 57% plan increases in tablet purchases. channels In contrast, 50% plan to decrease in- • New mobile operating systems vestment in traditional POS terminals. designed for consumer applica- On the other end of the spectrum, a tions 2015 survey by web-based consultancy • Feature-light POS soft ware Soft ware Advice, primarily of one-store intended to work across a wide retailers, found 85% calling tablet their range of POS users • Lack of peripheral drivers • Limited ports • Cluttered appearance due to mis- “In one fell swoop matched components, multiple we can integrate all power cords and cables, etc. communications from tablet • Challenges in migrating data from old platforms to new to printer, bar code Over time, many of these challeng- scanner, payment device and es have been mitigated. Some upstart mobile POS companies discovered the cash drawer. It’s a single channel and began to embrace it; oth- SDK for all peripherals.” ers emerged with a 100% channel-only model. Developers have recognized — mattheW inan, direCtor of the need for hybrid solutions that al- BUsiness deVeloPment and sales oPerations, e-naBler low POS to function even when an In- ternet connection is lost. Mobile POS developers have had time to add depth and specialization to their product offerings, so that several now rival long- standing traditional POS applications in functionality. 4

vsr_Powa_wp_1015_v3.indd 4 9/10/15 3:18 PM “Rather than requiring code scanner, payment device and cash drawer. It’s a merchants to do a piecemeal single SDK for all peripherals,” addressing the vast majority of devices an ISV or solution provider may installation of products, want to specify. if you can provide chip card and mobile payment “I call PowaPOS the Apple Computers of POS hardware, because they’ve consolidated everything into capability and security a single, nice-looking unit, and as an integrator, you tools like encryption and don’t have to deal with anyone else. It’s just one SDK. It’s a pretty slick solution you’re putting out the door,” tokenization to protect says Worldpay’s Ritchie, a former reseller. “Back in security, that’s a great the day, we all had to purchase some middleware, suite of services to offer and then figure out which hardware works with that middleware,” Richie continues. “It was usually so the merchant. Doing it complicated that we had to call in the bank guys. To- all together increases the day when you get that tablet, the only thing you have to do is type in the merchant ID from the processor value.” and you’re ready to take payments.” — Jason Oxman, CEO at the Electronic Transactions Easing the Transition Association Another key development is the introduction of low-cost and powerful Windows-based tablets. Be- cause many POS software packages were developed in Windows, this allows ISVs and solution provid- Now solutions are emerging which make integration ers to adapt the user interfaces of these products to of tablet POS solutions easier. For some time now, work on the tablet/touch form factor. That enables mobile POS software developers have needed to them to stay on trend with tablet products while employ separate software development kits (SDKs) leveraging their significant investment in software for each peripheral they certify for their applica- development. tion. Now solutions are available that incorporate all peripheral drivers into a single SDK, significantly Most enterprise-level POS buyers start out by aug- simplifying development tasks. PowaPOS’ SDK, for menting traditional POS with tablets, says e-Nabler’s example, includes software APIs, documentation, Inan, so they want mobile POS to integrate easily with sample code and applications for scales, shopper dis- their current environments, including fixed POS and plays and payment devices in addition to printers, back end systems. Windows Mobile facilitates this. cash drawers and bar code scanners. The SDK works with Android, iOS and Windows Mobile. Offering Windows tablet solutions also opens up new markets among merchants who could not pre- The PowaPOS SDK includes an abstracted interface viously afford full-blown POS systems. For SMBs, to all devices that are part of the PowaPOS architec- operating tablet-based POS means gaining access ture, as well as the server functionality. Abstracts to powerful, cloud-based back-end management and groups are related functionality by type (PED, software that was unaffordable via a licensing mod- peripherals and server). Functional groups share the el. Cloud-based mobile POS solutions integrate same behavior independently of drivers in use, and easily with commonly used packages such as Sage available drivers/servers can be swapped or added to and Quickbooks, and migrating data from older allow flexible deployments. systems to these newer platforms can be accom- plished easily. “It makes development very fast and convenient,” says e-Nabler’s Inan. “In one fell swoop we can inte- Finally, there is the maturing and growing sophis- grate all communications from tablet to printer, bar tication of mobile POS software itself. While light- 5

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weight upstarts are plentiful, the most structure in the United States. Experts well-established tablet POS packages predict the cost of magnetic-stripe have passed the fi ve-year mark. In that credit card fraud will rise to $10 billion time, developers have adopted many or higher this year, for example, be- of the features and functions found cause of the lack of security, and that’s in traditional POS soft ware. Th rough just the hard costs. No merchant wants their own code and via cloud-based to land in tomorrow’s headlines and integration with backend manage- suff er the damaging impact to their ment soft ware, some of these solutions customers’ trust. are now quite robust, and many have been customized to meet the needs of But merchants and solution providers specifi c sub-verticals. alike have found it diffi cult to under- stand and comply with the evolving “It’s correct that here are a couple of PCI standards intended to make pay- hundred tablet POS solutions that are ment more secure. very simple, with people looking to Th e advent of EMV, growth of NFC solve the simplest and most ubiqui- use, and the introduction of tokeniza- tous problems — scan the bar code, tion and point-to-point encryption checkout and pay,” says Kounta’s Seed. into payment are welcome news to ad- But multi-location packages such as dress these gaps. According to Th e New theirs rival Micros in sophistication York Times, in Europe, which has sig- and functionality including POS, la- nifi cantly preceded the US in adoption, bor and business management, fran- EMV technology has driven a 65% re- chise management and integration to duction in card fraud. Surveys by Visa many other backend applications, he show 63% of consumers want a chip says. “Th ere are people like us emerg- card as soon as possible. ing at half the price.” NFC, the contactless version of EMV, extends its benefi ts with the added convenience of wireless payments and “Some PC-based POS can look smartphone wallets. a little daunting. We think But along with interest in EMV, NFC, we will start to see more and tokenization and encryption come more industries using tablet concerns about the cost and complex- ity of implementation. and phone-based POS.” Unfortunately, solution provider and — JUstin GUinn, marKet researCh assoCiate, softWare adViCe payment ISV experience with chip cards is close to non-existent. Many are as eager as merchants to work with POS solutions that distance the hard- FiT For ThE PAy- ware and soft ware from payment pro- MEnT: lAndScAPE: cessing, and make implementation of gETTing PoS oUT new devices simple. oF ScoPE “With the dawn of EMV payments, High profi le security breaches have how integration to payment devices is raised public awareness of the many handled is becoming a true challenge fl aws with the current payment infra- in our industry,” says e-Nabler’s Inan. 6

vsr_Powa_wp_1015_v3.indd 6 9/10/15 3:18 PM The current gold standard lies in solutions that employ these technologies to get POS hardware and “PowaPOS raises the bar.” software out of scope — removing any contact with — Matthew Inan, Director of the sensitive data that lies at the heart of payment Business Development and Sales transactions and security standards. That exempts Operations, e-Nabler the merchant and solution provider from many of the hands-on tasks of ensuring compliance.

One innovative approach to meeting this need comes as an obstacle to greenlighting a POS replacement through PowaPOS’ single SDK. In addition to man- project. This can also be a particularly strong sell- aging all POS peripheral integration, the PowaPOS ing point for solution providers competing against SDK establishes an out-of-scope environment for in- “free” tablet POS solutions that are sponsored by a tegrated payment applications by providing a secure specific processor. The ability to offer EMV upgrade and firewalled interface to PCI and EMV compliant together with POS and quickly remove liability will devices. It also includes certified interfaces to be a strong selling point for solution providers sell- several widely used payment processors. The SDK ing to SMBs. handles all of the communication between the POS software and the PIN pad or other payment In fact, it’s the “M” part of this group that may be device for all types of payments, including mag most in need. stripe, EMV, NFC and debit, gathering the required data and forward-ing it to the selected processor. Ingenico has predicted that most Tier 1 merchants will be ready for EMV by the October 2015 deadline, “By virtue of integration to the Powa system we can and small merchants will gain EMV through pre- isolate the interface to payment devices, and for all packaged solutions, but mid-size will be the last to intents and purposes keep the rest of development adopt. According to an Ingenico-authored article on isolated away from what could be a challenging and Mobile Payments Today, “These merchants often rely difficult integration from POS,” says e-Nabler’s Inan. on third-party systems integrators that, on the whole, are not as knowledgeable about EMV. We think that PowaPOS’ solution “is in the cloud, so by using their this class of merchant will represent the long tail of SDK the ISV doesn’t have to worry about storing that this issue. Based on our field work, we predict that information locally and being in scope,” says World- most of these merchants will not be prepared for pay’s Ritchie. EMV until well into 2016.” Ingenico recommends mPOS as a path to faster EMV adoption. For POS software developers, PowaPOS SDK saves thousands of dollars they would otherwise pay in “We can integrate any Bluetooth payment device that ongoing assessment and certification fees to ensure works with our iOS or Android or Windows solutions their packages are PCI compliant. without having to impact the rest of the functionality of the POS and without having to worry about For both ISVs and solution providers, the PowaPOS being within PCI scope and deliver [customers] an SDK also gives them the flexibility to align with the EMV certified payment solution,” says e-Nabler’s processor of their choice. “The ISV orV AR is able to Inan. “The form factor design of PowaPOS allows us form a close relationship with a processor, and using to integrate the payment device on the same unit, al- PowaPOS allows them to do that because they sup- leviating the clutter and making a well-organized and port multiple processors,” says Worldpay’s Ritchie. designed system.”

Alternatively, solution providers and ISVs can leave Solution providers and ISVs that want to align with the choice of payment provider up to the mer- a particular processor can still do so. EMV requires chant under this model. This can be key in situa- certification with each individual processor and card tions where the merchant prefers to maintain a brand, but the PowaPOS approach takes care of that long-standing processor relationship, removing it with multiple vendors. 7

vsr_Powa_wp_1015_v3.indd 7 9/10/15 3:18 PM OCTOBER 2015 A VSR whitepaper About powapos

PowaPOS is a division of Powa Technologies, an international commerce specialist focusing on technologies to transform the retail market. The Powa “Obviously integrators and VARs and ISVs want to be suite includes PowaWeb — a powerful cloud-based full-service solution providers,” says Jason Oxman, eCommerce platform, PowaTag —an innovative CEO at the Electronic Transactions Association. payment enablement application, and PowaPOS — “Rather than requiring merchants to do a piecemeal a sophisticated tablet-based POS solution. installation of products, if you can provide chip card PowaPOS is the first truly all-in-one point of sale and mobile payment capability and security tools system designed specifically to take advantage of the like encryption and tokenization to protect security, growing demand for tablet-based payments. With that’s a great suite of services to offer the merchant. just a single power cord, merchants can power up Doing it all together increases the value.” the PowaPOS T25 and its beautifully and intelligently placed peripherals, from its thermal printer and In addition, “EMV gives you the capability to add mo- 2D scanner, to the rugged cash drawer and swivel bile payments acceptance to a transaction,” says ETA’s position sensor. Oxman. “So if you’re looking to install EMV for a mer- The PowaPOS T25 is also the first purpose-built, chant, you can do mobile acceptance along with it.” all-in-one hardware platform designed to support all operating systems: iOS, Android and Windows. With Unlocking the Key the PowaPOS hardware platform, businesses can now to POS Trends have all the power of an advanced POS system in a sophisticated, space-saving, and cost effective design. POS solution providers are experiencing rapid change as market affinity is building for tablet-based PowaPOS provides: POS. As the tablet’s price, connectivity and stream- 1) Scalability: Flexible enough to grow with the lined form factor attracts more and more buyers, so- business and adapt to changing times, evolving lution providers need to craft product offerings that software, and individual merchant needs. tap into three key trends: 1) A truly tablet-friendly all-in-one that stream- 2) Security: Built in ports integrate most EMV-ready lines the previously cluttered appearance of tab- and NFC payment devices. Our advanced design let POS. and the powerful PowaPOS SDK means current and 2) Out of the box functionality that makes POS future security requirements are met. simple for ISVs to integrate and solution providers to install. 3) Simplicity: The days of mismatched components 3) Easy-to-integrate payment processing that dis- and cumbersome set-up are gone. By integrating tances the POS solution provider and ISV from key retail peripherals, all powered by a single cord, PCI compliance headaches. PowaPOS is ‘plug and pay’ right out of the box.

PowaPOS’ solution incorporates all of these trends. 4) Speed to market: With its single API, integration It “increases the credibility of the solution,” says e- to the PowaPOS SDK is streamlined. Access to Nabler’s Inan. “It’s sophisticated, future-forward, powerful POS applications to payment processing sleek and convenient design of the system definitely to PowaTag and more are all available via one adds to the credibility of the solution to win the in- integration. terest especially of the enterprise class that has been on the fence for years” about tablet POS. “PowaPOS With PowaPOS, tablet POS has both form and raises the bar. function, finally. Visit www.powa.com/powapos to learn more.