30 November 2020
Reading Time: 3 mins
30 November 2020
Reading Time: 3 mins
Point of sale (POS) and payment processing devices make payments easier for everyone. There’s no need for the customer to withdraw cash or find the right coins, no need for the merchant to handle money or worry about forgeries, or for their bank to arrange a secure collection of that money.
But the biggest opportunities are for card issuers and payment processing companies, who get a small fee from billions of global transactions. In the US alone, $52 billion of interchange fees were collected from merchants in 2019 – a 10 per cent increase from the previous year.
This overall opportunity is likely to grow significantly as the world shifts away from cash, and late adopting countries embrace card and contactless payments. In this blog, we explore why connectivity is vital for this success. Keep reading to learn about five common ways transactions are lost.
A customer pays for their taxi journey back to their countryside home. The driver starts up the POS device. It takes a while to connect. They wave their card and the transaction doesn’t process the first time. The taxi driver offers to try again but the customer is rushing and decides it’s easier to pay in cash.
A restaurant owner has three POS devices from different banks. They use one device until it has a problem processing a transaction, at which point they apologise to the customer, and grab the next one. The problem device is thrown to the back of the drawer, where it won’t be picked up again until the other two experience problems.
A market trader is selling fast food with a high turnover. The mobile network is congested, and every transaction is taking three times as long: 12 seconds instead of 4. The small delays add up and the queue gets longer. People who planned to eat there give up on the slow-moving queue and visit the stall next door which is processing payments quickly on another network.
After a long queue, a customer must wait while the terminal tries to connect three times. Payment providers anecdotally report that transactions taking longer than seven seconds make customers visibly frustrated, even if it is not the merchant’s fault. Furthermore, the way that an experience ends disproportionately impacts how we remember it.
A merchant is frustrated by slow processing times, which they blame on the device. They complain to the issuer. Irrespective of whether the problem is a fault with the terminal, network or merchant, time and money is then spent handling and investigating complaints and reissuing devices.
What do all five of these scenarios have in common? The connectivity failed the POS device. If each of these vendors had access to ubiquitous, reliable and continuous connectivity they would have successfully completed all transactions.
Quality connectivity is not to be underestimated. It offers many advantages to POS payments in terms of coverage, uptime and speed.
Speed is of the essence. Once the price is entered, the payment should happen as soon as possible and go through the first time. This means the device needs to start up quickly, connect to a mobile network, transmit payment data to the bank, which in turn authorises the transaction and confirms it back to the terminal. This should all happen in a few seconds.
A short delay or a payment which doesn’t go through may not sound like a big deal, but scaled up across all the world’s transactions, it adds up. Connectivity is therefore critical.
Look out for our next blog to find out how to optimise payment devices and processing terminals, improve the customer experience and increase revenues.
Eseye empowers businesses to embrace IoT without limits. We help them to visualise the impossible and bring those solutions to life through innovative IoT cellular connectivity solutions and class-leading IoT professional services.