Meeting Security Demands in Digital Experiences Presents a POS Challenge

Merchants attempting to create more digital experiences in their stores and restaurants because of consumer expectations are finding security of payments to be a significant challenge, finds the “Step Up The In-Person Experience” report issued by Forrester Consulting Inc.

Commissioned by tablet point-of-sale maker Revel Systems, the report examines how consumer demand for a singular store experience is altering demand for point-of-sale equipment. It included responses from 150 retail and restaurant firms with at least 25 U.S. locations.

In the report, 93% say they agree or strongly agree that it is important to “infuse digital capabilities into physical locations to improve customer experience.” Similarly, 93% also maintain that the use of smart phones has raised customer expectations of how merchants run their businesses.

But there are obstacles in the way, with ensuring the security of payments chief among them. Sixty-four percent of retailers and 58% of restaurant owners say payment-security challenges prevent them from providing “excellent in-store/in-restaurant experiences.”

Other obstacles include employee training, an inability to provide personalization, lack of proper technology, and ensuring adequate inventory.

The prevalence and frequency of data breaches, like those at The Home Depot Inc., Target Corp., and Michaels Stores, has made payments security a “major priority and concern for consumers,” says Chris Ciabarra, Revel chief technology officer, via email.

Industry efforts such as the shift to EMV chip cards further amplifies the prominence of payments, he says. “EMV is a shift away from aging magnetic-stripe technology towards a more secure future,” he says. “What makes EMV more secure is that the technology encrypts each payment with a unique transaction code, requiring every transaction to be validated by the card issuer when inserted into the payment terminal. Card data never has to enter the point of sale, reducing the risk for data theft or card fraud.”

Though payment security challenges ranked high among obstacles, assurances of security, at 31%, came in fourth when merchants were asked to rank the most important qualities for an “excellent in-store or in-restaurant customer experience.” The top item was the ability to engage customers through digital channels to fulfill needs, cited by 44%; followed by up-to-date store technologies, 41%; and knowledgeable and helpful employees, 38%.

Merchants anticipate making POS-system improvements a top goal in 2016, Forrester says. But many—59%—said the lack of the right technology prevents them from doing so.

The report also found that 51% already have the ability to fulfill orders in-aisle, and 47% can cull long lines away from the checkout counter using their POS equipment.