Impact 21’s Steve Patterson reveals how customers are now engaging in Foodservice and Financial Services. Steve serves as a Principal Consultant with expertise in Payment Methods, Point of Sale Implementation, Technology Infrastructure, Enterprise Integration, Financial Accounting & Analysis.
Part 1 of 2
POS systems have dramatically changed over the past few years—or at least they should have. Aside from PCI compliance, what new features and functions are in demand by retailers?
Taking PCI and EMV out of the discussion, I believe the most pressing new features revolve around foodservice, financial services, customer engagement and the interoperability of devices.
The options for foodservice concepts available to convenience retailers have exploded; just look at the vendors at the NACS shows. Along with this expansion of options comes an expansion in ingredients, menus and the need to track ingredient inventory. Ordering a custom pizza, taco or sandwich is expected by the customer and tracking each ingredient effectively will maximize profitability. The major POS providers in the market have addressed this with new product offerings, but there are still missing features. These systems meet most needs for the QSR, but lack features required by table service restaurants (i.e. tips and tabs).
Financial services, such as bill-pay, money orders/transfers and check cashing systems need to be integrated into a highly-controlled system. There is, and will be, a percentage of the population that remains unbanked and this can be a quite profitable category. It can also be a control nightmare—the more steps and standalone devices the less control you will have. I see the POS interfaced to the authorization network and a smart safe.
POS systems are almost always a key part of a customer engagement and loyalty strategy. It is typically the primary point of interaction between the retailer and consumer and has become what could be termed a “point of commerce” whereas it was previously only thought of as where payments were made.
Interoperability is a key to the future of retail technology. This has always been a goal of Conexxus and needs to be supported, through participation, to reach the goal of a standard interface for every technology in the industry. POS vendors have been responsible to write, test and charge for every device interface. Imagine how much time and effort was saved by having a single interface for any Electronic Payment Server (EPS), fuel price sign, and smart safe. New systems and services are being tested and implemented every day. Recently I was directed to a local convenience store when I decided to return a shipment from Amazon. Before these new systems become mainstream, it would be great if the vendors could build that new system to a standard.
Customers are more aware than ever regarding POS systems. They often look to insert their credit card into a chip reader, only to see a handwritten note instructing to swipe their cards. What’s most important to consumers in these changes—security, convenience, speed? Why?
It seems most consumers want convenience more than anything, but in reality, they want conformity. As C-Stores are lagging behind most retail industries, they are experiencing both the benefits and the concerns of EMV. Earlier adopters of EMV (predominantly grocery and general merchandise) have trained the card user about the added security. They have also given the consumer the experience of a slightly increased processing time. Unfortunately, the consumer is getting tired of trying to remember where to swipe and where to dip. As for the handwritten sign, most payment terminals have the graphic ability to put the proper card read method on the screen. Some retailers have resorted to using tape to block the area to the chip reader. Not all retailers have upgraded the POS software to leverage the chip technology. Devices still need the ability to swipe or chip to handle different card technology.
How are POS companies, and retailers, addressing customer security concerns?
Most POS systems providers have network and card brand certified EMV upgrades and are ready to implement. There are a few certifications left to be completed, but for the most part, the delay is shifting to the retailer who is typically fighting competing priorities or wanting to include last minute changes to the EMV landscape like PIN bypass or quickchip. I am also concerned because the increase in secure data transmission from the dispenser payment device will significantly slow down the authorization. Nothing feels worse to a customer than adding an additional 5 seconds, when you’re at a dispenser and it’s -5 degrees. Many solution providers have developed hardware to allow retailers to convert their legacy two-wire communication to the dispensers with hybrid TCP-IP to boost data transfer speeds.
Unfortunately, the pushback of the EMV at the forecourt deadline has halted a lot of upgrades. October 1st, 2020 is not that far off, when you look at the scope of the upgrade of EVERY card-reading dispenser in the country. Many areas may see resource constraints in installing new equipment so it is important to take that into consideration.
What else are customers concerned about?
Convenience marketing is just that, convenient. If it isn’t easy and quick, it’s not convenient. I am seeing more retailers installing scratch off lottery ticket vending machines, where it is legal. This is a great convenience to all the consumers as it reduces the sales lines of customers shopping for the right scratch off ticket, and then getting back in line to get another free ticket winner redeemed. Automation of the sale and product delivery needs to be expanded, including ATM, propane exchange and other transactions that don’t require human interaction.
What should retailers be doing to improve the customer experience at the POS terminal?
POS vendors are implementing up-selling systems at the sales counter. When implemented properly and executed well it does help the consumer get more targeted promotions while creating interaction between the consumer and the cashier.
I trade at a local retailer that is EMV inside, but has not set it up at the pump. I see the EMV card reader in the dispenser head, but it was not activated for anything but a dip. This is the position that I as a retailer would want to be in. Unfortunately, the vast majority isn’t even close to where they should be.
Stayed tune for the second installment of our interview with Steve on How Customers are Engaging with Foodservice and Financial Services