Tagged in: POS

Is a Cashless Society Really a Good Thing?

More and more countries are leaning towards cash-free economies, where the need for paper money would be completely eliminated.

Though some feel that a digital economy would offer a number of benefits, such as increased security and decreased counterfeiting, others feel that a such a world would usher in a new era of Big Brother.

India Leads the Push for a Cashless Economy

India recently made headlines with its aggressive demonetization policies.

Ostensibly to combat counterfeit currency, corruption, and black money, on November 8th, Prime Minister Modi invalidated 86% of the nation’s circulating currency. In an announcement that took many by surprise, he stated that existing 500- and 1000-rupee notes would only be valid for 4 more hours, after which they would have to be exchanged for newly designed banknotes.

In India, 90% of transactions are made in cash, almost half of the population doesn’t have a bank account, and 1 billion Indians are without smartphones. So it’s no surprise that this move caused a significant amount of chaos. Long ATM lines, unpaid wages, and the emergence of a barter economy are just a few issues that have arisen since the transition.

Critics have claimed that the problems India is trying to fix – black money and corruption – are unlikely to be affected, since such criminals often hold money in overseas bank accounts and property holdings.

Despite these downsides, proponents feel that cashless is king. E-money stocks have surged, digital payments have soared, and India’s IT Minister predicts that the country’s digital economy will grow to $1 trillion over the next few years.

Some even predict that POS will become “redundant,” or at least look completely different, since people will “just use their thumb” to pay.

The Worldwide Trend Away from Cash

Other countries, from Zimbabwe to Korea to Sweden, are also leaning towards cash-free economies. Each country has its own reasons. As mentioned in the November newsletter, Zimbabwe’s diminishing cash supply has rendered much of the nation reliant on debit cards.

Other countries also feel that a cashless future is at hand.

Sweden, for instance, is at the forefront of the cashless movement. In part due to the expediency and efficiency offered by digital payments, the country is slowly transitioning to plastic and digital payment options. Many of the country’s banks, for instance, no longer dispense cash.

Korea is also leaving paper currency in the past.

Koreans are carrying less cash and using more credit cards each year, which is a good thing, according to the head of the research center at the Credit Finance Institute. A digital economy, he claims, will cut costs as well as crime and corruption. The Bank of Korea is planning for a country without cash by 2020.

Is America Next?

A 2014 survey by Bankrate.com found that 1 in 10 Americans carried no cash in their wallets. Younger generations, also, are even using digital payment services, like Venmo or Paypal, to exchange cash and reimburse one another for expenses.

Despite the fact that America leads the world in most areas of technology, including POS and payment processing, many still cling to paper money.

Former Treasury chief of staff Mark Patterson stated that many Americans still dislike paying with devices. And, he adds, many Americans remain “unbanked, making electronic payments impossible. As long as there are babysitters, bellhops, doormen, street vendors, and Christmas stockings, there will be cash.”

Pros and Cons of a Cash-Free World

In a world without paper currency, there would be no reason to hold up a retail store. And there would be fewer reasons to mug someone or snatch a bag on the street. Though digital currency may be vulnerable to cybercrime, the threat of physical violence would be significantly reduced.

Although paper money has its drawbacks, it also allows offers a certain degree of financial freedom to the individual, who can store physical cash in safe places.

Some worry that a digital-only world would hand over far too much power to the government. If the government or a bank decided to freeze a person or a business’s bank accounts, for instance, then they would be completely financially paralyzed.

And, as mentioned, cash lets waiters, bellboys, and babysitters to accept tips for their services.

Though a cash-free society may not happen within the next few decades, if an emerging economy like India can make the push for a cashless economy, then don’t be surprised if the rest of the world eventually makes the shift.

Versatility – The Key Trait of Tomorrow’s Successful POS System

As technology becomes more advanced, customers continue to demand more from their shopping experiences, both online and offline.

To meet the needs of both retailers and shoppers, POS systems are becoming more and more versatile in the services they offer.

When debit and credit card readers were first introduced, they began to transform the way we make purchases. Current POS systems encompass a wide range of business functions, such as cashless transactions to data collection.

Today, keeping the customer happy in a competitive marketplace means offering a superior “customer experience.”

In other words, it is the retailer’s job to make the entire shopping journey, from product selection to checkout, as pleasant and user-friendly as possible.

How Versatile POS Systems Help the Retailer and the Customer

Business owners are certainly aware that a POS system can automate or semi-automate many business tasks, from inventory to order entry to data collection.

However, as technology and new payment methods continue to advance, versatile POS systems will become even more necessary.

Here are just a few of the diverse features that retailers should pay attention to when looking at the evolving POS market:

Cashless and Digital Wallet Capabilities

Though digital wallets – the ability to pay directly from your smartphone – have their fair share of skeptics, the number of digital payment options continues to grow. And the number of customers using these digital wallets also continues to grow.

Android Pay, Google Wallet, and Apple Pay are among the biggest names. But many other companies are jumping onto the bandwagon, including Chase Bank, Amazon, Alibaba, Samsung, and others.

Delays in adoption are due to security concerns, as well as slow adoption rates by both customers and retailers.

However, the sheer number of digital wallets being implemented suggests that this may become more than just a fad.

EMV Compliance

Another major trend we see in the payment processing world is the transition to EMV credit card readers.

On October 1st, 2016, banks shifted liability for fraud cases over to businesses, in cases where those businesses had not adopted chip-enabled card readers.

Though some argue that this is no reason to panic – after all, no one will be arrested if they aren’t EMV compliant – it’s clear that banks and industry leaders are aggressively pushing for EMV adoption.

And, as they do, more and more customers are being issued these cards, and security concerns may drive some people to shop where EMV cards are accepted.

Mobile POS Integrations

The biggest benefit to mPOS solutions is their portability.

They can be used on the floor, in the field, or wherever your staff happen to be. These systems often include a host of other functions, from cloud updates to design flexibility to data collection.

POS vendors are also continuing to introduce new integrations, such as mPOS devices that are able to accept both EMV cards and digital wallets.

Though mPOS devices are still in the minority, they are currently the most versatile devices, and may prove to be the standard at some point in the future.

Tomorrow’s POS Integrations

Although the POS and payment processing industries have encountered obstacles during their growth, expect technology to offer more integrations in the coming years.

Expect to see POS systems that offer even more advanced technologies and functions, such as:

  • Age Verification
  • QR / Bar Code Scanning
  • Acceptance for All Major Digital Wallets
  • Contactless Cards

Ultimately, the POS systems of tomorrow will be much more versatile than today’s most current models, making life easier for both retailers and customers.

The Bottom Line

If you want to keep up with the demands of your busy customers – and stay competitive – it pays to keep an eye on the busy world of payment processing.

The checkout line has a significant impact on customers’ wait times, their retail experience, and their perception of a brand or company.

Though all new technologies have an adoption curve, the history of credit cards shows how new technologies can eventually become the norm. In a few years’ time, all retailers may be using versatile POS systems that do much more than read magnetic stripes.

Protecting Your Business (And Your Customers) from a POS Security Breach

Day after day, POS software companies are developing an increasing number of options to better protect and serve customers.

Though hackers are always innovating, there are steps you can take to protect your data and your customers.

By utilizing the tips mentioned in this article, you can work against these hackers and better serve your clientele.

1. Utilize End-to-End Encryption

Encryption is one of the most powerful security tools you can have at your disposal. Recently, Hewlett Packard Enterprise Security teamed up with Ingenico to create a product that will protect customer data from the most common cyber attacks.

So how does end-to-end encryption help keep your customers’ data safe?

Most malware is designed to steal information the moment a customer swipes their card. By retrieving credit card numbers from a POS machine’s RAM memory, the hacker can gain access to that unencrypted information.

If a company chooses to use end-to-end encryption, however, the credit card information will be protected from malware the moment it is swiped.

In other words, this process “locks” the customer’s payment info from beginning to end.

Since hackers are continuously working to better their own techniques, end-to-end encryption is a method of protection that prevents attacks and eliminates the vast majority of system vulnerabilities.

In an effort to offer even more security, businesses can also employ techniques such as “tokenization,” which work to store card information under digital alternatives within the company’s system.

2. Increase Monitoring

All too often, the only security put into place within a business’ system is an easily guessable password. Hackers have developed an array of tools to crack passwords, which can then be used to gain access to financial information.

By employing additional security precautions you can help prevent a data breach. Some of the most common methods are the following:

  • Anti-Virus Software
  • Firewalls
  • Two-Way Authentication

While utilizing these suggestions is a start, the most beneficial way of protecting your system is by monitoring all payment activity. As a business owner, it is your responsibility to look for suspicious activity or vulnerabilities at every computer and POS machine in your establishment.

Companies like Netsurion have begun offering security solutions such as these to small- and medium-sized businesses.

3. Test Your Procedures

Once you’ve decided to employ end-to-end encryption – or put into place security measures and monitoring techniques to work against cyber attacks – you need to make sure that they’re working efficiently.

Testing will help you find inconsistencies or missteps that could lead to a data breach.

If you have the budget, consider hiring a security specialist to test your POS system’s security measures. Since a POS product may be installed by a third-party provider who may not specialize in security, this simple step can help you and your customers stay safe.

5 POS Terms You Should Know

When it comes to the ever-expanding world of POS systems, keeping up with the jargon can seem daunting.

However, to keep up with the changes in POS technology, it’s a good idea to learn some of the latest terminology.

1. mPOS (mobile POS)

mPOS refers to using any mobile device in the same way that you would use a traditional, stationary POS system.

Any of these electronic devices can be transformed into a mPOS by downloading an app created by companies like Square or PayPal. An mPOS system can be a cost-effective way for small business owners to handle their retail transactions.

2. PCI (Payment Card Industry)

PCI refers to the collection of security standards that have been put into effect by the Payment Card Industry to protect customers during their use of various POS systems.

These policies directly apply to any company or organization that accepts payments through the use of credit and/or debit cards.

3. NFC (Near Field Communication)

NFC works by placing two objects within close range of each other in order to use them.

Utilizing radio communication, this recently developed technology has been a game-changer in the retail world.

Mobile payment systems like the following make use of NFC technology:

  • Apple Pay
  • Samsung Pay
  • Android Pay

4. mCommerce (Mobile Commerce)

Also known as e-commerce, this term covers any transaction that is handled online through electronic devices like:

  • Smartphones
  • Tablets
  • Laptops

When customers are using their mobile devices to purchase from online markets like Amazon and Ebay, they are taking full advantage of mCommerce retail.

5. IoT (Internet of Things)

IoT is an acronym that refers to the “Internet of Things.” This term refers to the collection of everyday objects and devices that have the ability to send and receive information to one another.

Such machine-to-machine (M2M) communication will allow virtually any electronic device, from a refrigerator to a cell phone to a security camera, to communicate with other devices. In turn, these devices will be connected to the internet, enabling revolutions in POS and other business software systems.

Study Finds that More Personalized POS Provides More Profit

A recent study performed by Forrester Consulting explains that a retail store or restaurant’s future success ties directly into their usage of integrated POS systems.

In our technologically advanced marketplace, a POS system should extend beyond monetary transactions.

By updating the digital usage within a business’ physical location, businesses can achieve a number of benefits:

  •      Improved customer experience and interaction
  •      Employees that are better equipped and more prepared
  •      Enhanced flow of operations
  •      Access to increased data sources

Ability to Better Serve Customers

In a pool of 150 surveys:

  • 87% of the respondents declared that they are interested in tablet-based POS systems as a means of improving employee-customer interactions
  • 93% believe that it is essential to integrate a digital experience into physical locations.

As technology advances and provides better customer experiences, consumers and shoppers are becoming more demanding.

Today’s customers expect employees to have thorough knowledge about the business, including inventory and other options. The majority survey respondents also note that their digital presence has become a direct extension of their physical one. This leads to an increased desire to utilize digitized options within retail shopping and dining.

The following are some of the most common expectations that business owners and employees are being forced to try and meet:

  •      Ability to check store inventory, including that of other locations
  •      Ability to fulfill restaurant and shopping orders both tableside and in store aisles
  •      Rapid checkout procedures
  •      Increased customer security assurances
  •      Access to customer profile and purchase history
  •      Capacity to recommend items and selections

Making the Move to Advanced POS Systems

The vast majority of decision makers who were surveyed also recognized that advanced POS systems positioned them to better meet the needs of today’s customers.

Just as the customer is looking for improvements in their shopping experience, though, businesses face a number of concerns when making the switch to integrated POS systems.

  •      High costs
  •      System Reliability
  •      Customer education
  •      Ease of use

All things considered, our society is on the cusp of a major transitional movement.

Customers are more educated and hyper-aware of what is available, while businesses are working dutifully to meet their evolving needs. It will be interesting to see what the next few years will bring in terms of customer-employee interaction.