How Payment Terminals Are Driving Revenue In North America
The past few years have seen the wholesale transformation of America’s checkouts. The introduction of EMV in 2015, followed by a shift in liability card rules, has driven vigorous investment in point of sale (POS) infrastructure – dramatically changing the ‘commerce’ landscape and heralding an explosion of innovation at the POS.
This is driving richer services and opening up new lucrative revenue streams for merchants. So, how are merchants exploiting this to attract, convert and retain more customers?
Exploiting POS Potential
Firstly, they are realizing that replacing their POS is not simply a ‘like-for-like’ decision. Technology has moved on significantly since their last upgrade. Modern POS devices are not dumb like their predecessors. They are powerful and smart with more memory, more processing power and more functionality than ever before.
They can take payments from all cards (including EMV), by contactless, by phone, from mobile wallets and, in some cases, accept crypto-currencies. They’re different on the outside too – often with full-color touch screens and multimedia capability.
Importantly, POS devices now come complete with their own software platforms and can be connected via the cloud to powerful payment gateways that can drive more than just acceptance. POS software is now a big US market with marketplaces and downloadable apps popping up regularly. These can be back-end facing – helping to make retailers more efficient through stock management or integrated order processing – or customer-facing, facilitating exciting new checkout services like e-loyalty and personalized promotions.
Increasingly, POS devices are portable, fully mobile or integrated with tablets and smartphones to bring a whole new world of acceptance and digital service straight to the consumer, instore and out.
Show me the money!
Armed with all this potential, where are North America’s merchants finding the biggest returns?
Attracting and Activating Buyers
With so much functionality, retailers are using the POS to encourage referral and uplift with apps and add-ons that boost AOV and loyalty. Point of sale marketing is now a key part of the marketing mix and is being used hand-in-hand with other marketing materials to remind customers of the product as well as offering incentives to buy. They are making full use of POS displays to engage and persuade new customers to spend.
Faster checkouts mean more throughput and higher sales. 88% of US consumers want their retail experience to be faster and US merchants are responding with self-service, kiosks and mobile POS. Contactless also has huge potential here. While just 3% of US transactions are currently contactless, its anticipated that this will rise as banks roll out contactless cards. By 2020, 56% of all US cards are expected to be contactless.
Consultative ‘smart’ selling
Personal interaction by ‘Savvy’ sales associates at key decision times pays dividends. That’s why US stores are arming staff with sales enabling tools such as integrated tablet/smartphone POS. Boosting sales through consultative ‘digital’ selling, this is also raising productivity with ‘at a glance’ stock management and sourcing.
Turning data to dollars
Actionable data collected by smart POS systems is the new gold rush for US merchants. They’re using real-time POS reports to mine better insight on their operations (making them more efficient), on their customers (using tokenization to track their journeys and preferences) and on their marketing effectiveness (delivering more targeted promotions and incentives.)
According to the US Census Bureau, Millennials now represent over 83 million people, (around a quarter of the U.S. population). But Only 33% of US millennials own a credit card. To tap into these segments, US merchants are offering new instant finance and payment solutions at the POS e.g. Klarna, AfterPay and AliPay.
Rewards that count
Increasing customer retention by just 5% is shown to boost profits by 25-95%. US merchants are shifting loyalty programs from simple points-based or voucher systems to targeted marketing campaigns that push out mobile coupons or offers based on specific customer behavior.
Gone are the days of one POS fits all. US merchants are exploiting over-the-cloud updates and payment gateways, to customize POS functionality so they can deliver better experiences and higher service profitability. Restaurants, for example, are using the POS to split checks, search menu items, track server performance, process online and tableside orders, report trends, void or comp items, track what menu items are selling well, and even train new employees.
It’s easy to see that the POS is not just about acceptance but also about delivering great sales ‘experiences’ that lead to higher revenue for the retailer.
As US merchants strive to make their goods more attractive and easier to buy, they’re increasing demand for open integrated commerce solutions from payment partners like FreedomPay, who can help them find new ways to inspire, educate and inform customers at the POS.