Mobile POS for Micro-merchants

I have been intrigued by the trend to accept mag stripe cards while on the go.  Mobile POS terminals have been used by large organizations for a while now (e.g., rental car drop-off).  However, acquirers did not find it cost-effective to offer similar services to micro-merchants (baby-sitter, handyman...) [US Market size/TAM of 26M].  The total transaction volume handled by these micro-merchants did not justify addressing this unmet need.  Payment received via cards by micro-merchants monthly can vary widely, starting from as little as nothing to thousands of dollars.  While most micro-merchants would like to keep their fixed costs to a minimum, those that wanted to have the facility to accept cards had very few service providers selling them this service [at a premium].

Note: This post evaluates the opportunities in the US market only.

Trusted Services Manager (TSM): Does somebody have an edge

Gridlock in the NFC ecosystem is about the telco/MNO (e.g., Verizon) and the issuer/bank (e.g., BofA) jostling for control over 'their' customer. On the mobile device, the two verticals (telco and banks) clash. Until the control issue is resolved, NFC deployments will not make progress past the many well-publicized trials. Trusted Service Managers (TSMs) are seen as a way past this impasse. Much has already been written about this issue.

The usual suspects in any TSM discussion are Cassis, Venyon and Vivotech (in alphabetical order). There are others in this space as well. The question for today is, is there any one vendor or approach that has an obvious edge, and why?

Cassis comes from a SIM / OTA background, with a lot of their management coming from Gemalto and the like. Venyon is a JV between Nokia and G&D. Vivotech seems to have a more POS / retail merchant proclivity given their presence in the contactless reader space. From this 50K foot view of the landscape, there seem to be at least two approaches to address this space. One is to approach this from the mobile operator space. Given Cassis's and Venyon's background, they seem to be establishing the telcos as their beachhead. Given Vivotech's background and investors, acquiring banks (POS vendors) and retail merchants seems to be Vivotech's beachhead. It appears that the above divide seems to be extending into the TSM space as well.

In deployments where the telco drives the business case, folks like Venyon and Cassis might win the day. In deployments where the acquirers/merchants are pushing the business case, folks like Vivotech might win the day.

Not withstanding a simplistic two variable view of the world, what are your thoughts? Are there any other factors that will influence the TSM space? Which other vendor/industry might enter the TSM space?

Related Post: When selling shovels is more lucrative: Another look at TSMs 1 year later

NFC POS Terminal deployments in the US

You can find a list of NFC/Contactless readers:

List of MasterCard Paypass readers near you
List of Visa PayWave readers near you

This will be a good resource for all of us to refer to.

PS: I have edited this blog as MasterCard and Visa are maintaining a comprehensive list of merchants accepting contactless cards.

Merchant deployment of Contactless POS terminals in the US

What is the merchant motivation to deploy contactless payments in the US?

The oft cited reasons for merchants to deploy contactless payments are speed and convenience associated with total transaction time. Cash replacement is also cited as a reason.

Consequently, QSR (Quick Serve Restaurants) space, gas stations, convenience stores... seem to be the obvious targets.

What is the motivation for Office Depot, Best Buy... to deploy contactless POS terminals? What would the reasons be for grocery stores to upgrade their infrastructure to contactless? Is the standard equipment (POS terminal) upgrade cycle is sufficient reason for merchant to swap out for the new terminals?

Look forward to hearing your thoughts.