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Retailers will take their time upgrading their point-of-sale systems for compatibility with the EMV chip card standards, finds EKN Research’s “2015 Retail Point-of-Sale Blueprint” report.
Only a minority of retailers—mostly the largest ones—will be ready by Oct. 1, though within two years 70% of them will be ready for the payment cards, the report says.
EMV compatibility is just one of four factors influencing retailer decisions to upgrade their POS systems, EKN Research says. The others are the ability to accept new payment methods, mobility, and multiple channel management.
Security-related factors, such as EMV and encryption, hold the most sway, at least in the short term, Sahir Anand, EKN vice president of research and principal analyst, tells Digital Transactions News.
More than 90% of retailers surveyed cited security and encryption, and PCI compliance, as the top two factors for adding EMV-compatible POS equipment.
Generally, retailers try to balance the factors, he says. The October deadline provides a little more impetus for them to deal with security matters.
It’s in the mid- to long-term that the other factors could have more influence, he says. “What’s really going to be disruptive is the mobile digital wallet and unified commerce,” Anand says.
The EKN report says 75% of retailers will increase their spending on in-store mobile products over the next 12 months, and that half of those surveyed plan to deploy mobile near-field communication (NFC) compatible equipment in the next two years.
That’s going to happen because mobile wallets, with their long gestation in the payments industry, finally have clarity for merchants, Anand says. “Merchants are not afraid to try different things when it comes to their mobile apps,” he says. In addition to providing product information, the apps are viewed as tools to incorporate digital loyalty, coupons, and receipts. In-app payment acceptance is the key for many merchants, Anand says, because they want to enable consumers to conduct all of their commerce without having to leave the app.
The notion of having a single POS system for in-store and online orders will spur many system upgrades, he says. Indeed, over the next two years, 83% of merchants plan to adopt a common POS-commerce platform, the report indicates.
Merchants need the ability to accept online orders within their stores, but do not want systems that require consumers to place an online order at one location in the store and pay for their in-store merchandise at the checkout, he says. Consumers want one place to do both transactions.
The ability to do that has been a struggle for retailers, Anand says. A unified POS system that tracks transactions across in-store, online, and mobile, can eliminate that struggle, he says.
Retailers also are interested in new payment methods, with 50% of them expecting to add payment options over the next 12 months.
