Aiming to Smooth In-Store Mobile Transactions, VeriFone Buys Global Bay

Extending itself further into mobile retailing and software, VeriFone Systems Inc. on Tuesday announced it has acquired 9-year-old Global Bay Media Technologies, a South Plainfield, N.J., vendor of in-store mobile solutions. Terms of the deal, which had already closed by the time of the announcement, were not disclosed.

The acquisition allows point-of-sale terminal kingpin VeriFone to deepen its footprint in software, which offers the prospect of recurring revenue, and hands it what it sees as a critical position in retail mobility. As mobile-payments services from such major players as Google Inc. and Isis, a joint venture from the country’s largest wireless carriers, roll out, VeriFone says it can now offer merchants a platform that will be already standardized to work with any mobile wallet. “Our goal is to be the middleware to let merchants move into the mobile-payments world,” says Jennifer Miles, executive vice president for North America at VeriFone.

Global Bay’s technology allows store clerks to take orders from customers on tablet computers that can show merchandise that might be out-of-stock or that might carry special discounts. In this way, the store could keep the customer’s business and avoid a walk-out, the physical-store equivalent of shopping-cart abandonment in e-commerce. The software also allows clerks to check out customers at times when lines grow in checkout lanes. In this scenario, the clerks become “walking cash registers,” says Sandeep Bhanote, chief executive of Global Bay and now general manager of VeriFone’s Mobile Retail Systems unit.

Users of Global Bay’s software, which the company says links to and works with existing store systems, include more than 100 retailers, among them Aeropostale, Ann Taylor, Crocs, Estee Lauder, Gymboree, Hallmark, Timberland, and Whole Foods Markets. Customer acquisition, says Bhanote, has been “absolutely incredible” over the past year with the widespread availability of tablet devices in the wake of Apple Inc.’s introduction of the iPad.

To these devices, VeriFone will add a souped-up enterprise version of its PAYware Mobile system, which it introduced early last year. The system, which includes a card-reader sleeve, lets tablets and smart phones swipe cards, giving merchants a card-present transaction. The system will also come capable of handling EMV chip card and near-field communication (NFC) transactions, Miles says, and will include a barcode scanner. “It’s a fully integrated payment appliance,” she says. “It has a framework that integrates to a variety of POS systems. It’s a very complex device.”

San Jose, Calif.-based VeriFone will rely on its market share among North American merchants, which Miles says runs in the mid-60s, to help sell its new mobile platform. It will also use its reseller channel, including independent sales organizations.

To observers, the Global Bay deal means VeriFone, historically dependent on hardware sales, can now broaden a strategy it adopted several years ago to lessen that dependence. “It’s an important acquisition,” says Rick Oglesby, a senior analyst at Aite Group, Boston, who follows mobile payments. “It’s a natural fit for them. VeriFone is becoming more of a software company, and you can make a good business out of being a payments-software provider.”