Different POS payment forms, including usd and bitcoin
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THE FUTURE OF PAYMENTS│TECHNOLOGY TRENDS CHALLENGING CURRENT POS ARCHITECTURE

Written by William Dawsey Posted November 3, 2017
Jim Garlock

William Dawsey

In this age of global commerce merchant services and payments providers must remain highly reactive to its ever-evolving tendencies, translating trends into progressive payment processing solutions and abandoning traditional POS architecture.

Consumers aren't interested in entertaining outdated POS options and wayward security standards; instead they're looking for a seamless experience that maximizes convenience. This means merchant service providers must adopt chameleon-like qualities, constantly changing color to match emerging trends.

The payment paradigm will continue to shift throughout this next decade in ways similar to the EMV chip card migration, only the technologies will be far more outlandish—integrating totally virtual and self-governing currencies and making it possible to purchase a new pair of shoes from anywhere on the globe with internet access.

The emergence of EMV tech made traditional magstripe credit and debit cards almost obsolete, but we know this. EMV smart cards look the same, feel the same, and have the same dimensions, but the addition of a small chip increases security tremendously, employing a cryptography and tokenization feature making it far more advanced than the easily corrupted magnetic stripe.

EMV emerged abroad and was subsequently integrated into the United States payments infrastructure. Chip cards are superior to traditional bank cards so much so that in 2015 major card networks including Visa, MasterCard, AmEx, and Discover imposed fraud liabilities on parties without EMV compatible systems.

THE MYSTERIOUS WORLD OF CRYPTOCURRENCY

Just yesterday Bitcoin turned nine, a birthday concluding with a surge that lifted bitcoin to an all-time high, maxing out at around $6,400.

There's certainly an air of mystery surrounding Bitcoin and all of the cryptocurrencies that followed in its wake. From the get-go Bitcoin has stirred up more questions than answers, beginning with: who is Satoshi Nakamoto, the masked brain child of this now global phenomenon?

Cryptocurrencies operate in a self-regulated, decentralized digital currency system. The system is built entirely on P2P interaction, and the network existing between an individual, who requests a transaction and miners who verify payments using algorithms. Once verified a new block is added onto the ever-evolving blockchain.

These blocks are permanent and cannot be altered. In other words, cryptocurrencies are the first known form of currency not tethered to some kind of trust-based system; they are totally incorruptible.

Cryptocurrency is still in its infancy, and there is no telling how it will impact global commerce as it matures. Just this past year, Bitcoin is up nearly 70%, and our clients predict that if reelected, China's president, Xi Jinping will lift strict band on bitcoin exchanges, opening the flood gates to free trade once again.

Perhaps the world is using China as a guinea pig to see how bitcoin integrates into traditional exchange, considering cryptocurrency's most unattractive quality is its volatility. It's difficult to trust an entity whose origins are unknown and whose power has grown so immensely in such a short period of time.

We may reach a point in the near future where people are paying for their groceries with bitcoin, and POS systems will have to liquidate cryptocurrency.

MOBILE PAYMENT AND BEYOND

In the realm of transactions it's difficult to distinguish the compelling trends from the fleeting. Here are two that are here to stay: mobile payments and unified commerce. These aren't just buzzwords, they're the future of payments.

Mobile payment technology enables consumers to use mobile devices to execute payment transactions. This is a result of Near-Field Communications (NFC), Quick Response (QR) codes, and cloud-based wallets.

To complete payments using NFC capable devices at the POS, users touch their mobile accessory to a NFC device, and it sends secured payment information to the merchant, finalizing the sale. This hardware technology requires both parties, the buyer and the seller, to have NFC enabled devices.

For devices not embedded with NFC hardware, QR codes can be utilized to make payments. Native QR applications are downloaded to a user's smart device. A barcode matrix made up of black and white squares is generated by the merchant at the POS and the user employs the camera to capture the code. Once captured, the user confirms the payment to complete the payment function.

Cloud-based wallets store accounts in a secure virtual cloud. Using Host Card Emulation (HCE) technology a mobile phone can use a contactless function similar to that of an EMV smart card to conduct a payment transaction.

Mobile payments are a facet of unified commerce, a commerce model calling for a total interconnectivity among different channels of the same marketplace, a holistic approach to commerce where mobile, desktop, and in-store marketplaces communicate intelligently.

THE BOTTOM LINE: ACT NOW, RATHER THAN LATER

These technologies are marketplace imperatives for every business big or small, and seeking a product that can be smoothly integrated with existing software and hardware will allow retailers to augment their POS while keeping costs minimal.

The truth of the matter is no one is certain what our POS architecture will look like in twenty or thirty years, but remaining fluent in new trends and implementing them intelligently will draw the line between success and failure for many merchant service providers and merchants alike.

Disclaimer:

Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu’s expertise spans across the entire IT spectrum.

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