'Very simple solution' keeps tech companies on their toes
Forget ka-ching. It's all tap-tap these days.
Restaurants and shop owners fed up with antiquated cash registers and expensive credit card terminals are switching to cheaper devices that plug into smartphones and tablets. And companies such as PayPal, Square Inc. and Groupon Inc. are rushing to meet them, developing sleeker stands to mount tablets running their software or hooking up with existing systems.
The shift is happening as mobile devices permeate many facets of consumers' lives, including the way they shop and pay for everyday items.
There are players of all sizes in the burgeoning mobile payment systems industry, including big financial institutions such as Bank of America and small startups such as Square in San Francisco. It has become a crowded field, and some of the bigger players are expanding their products to set themselves apart.
“It was a very simple solution, which makes it very difficult to develop differences,” said David Kaminsky, senior analyst for emerging technologies at Mercator Advisory Group. “Now you see them trying to expand into these slightly more complex tablet systems.”
The standard bearer has been Square, among the first companies to enable credit card payments to be accepted on mobile phones through its Square Reader and app in 2010. It has since experienced a boom in the number of businesses and people using the app, and it is processing more than $15 billion in payments annually.
The company said it plans next month to release what it calls Square Stand, which incorporates a built-in card reader that attaches to an iPad and a USB hub that connects to accessories such as a cash drawer, receipt printer and scanner.
For the cost of an iPad and $299 for the Square Stand, the company says small retailers can get a cash register that organizes their inventory and provides instant sales analysis.
That's significantly lower than similar systems running on standard cash registers that can be cumbersome and cost thousands of dollars.
“We're seeing larger brick-and-mortar merchants increasingly tearing out their old point-of-sale systems to run their businesses with Square,” said Faryl Ury, Square spokeswoman. “We built the Square Stand for these businesses.”
She said use of Square continues to grow on smartphones, but it's growing at a faster rate on iPads. IPad customers account for nearly 50 percent of total payments processed by Square, and the average payment volume processed by iPad customers is more than double that of customers using smartphones.
Analysts expect a dogfight as PayPal takes on Square, introducing in the next few weeks an incentive program aimed at persuading businesses to dump their tills.
EBay Inc.-owned PayPal, the pioneer of online payment services, won't be offering its own stand, but it has started a program called Cash for Registers.
PayPal announced this month that it will waive transaction fees for as much as $20,000 worth of transactions through January 2014 for the first 10,000 businesses that sign up beginning July 10.
Businesses that buy at least $450 in hardware — such as a stand, printer or cash drawer — can process payments through PayPal Here, the company's card reader for smartphones, on the iPad. They can also take cards or PayPal payments on other checkout stand systems that run PayPal software, such as Vend and Shopkeep POS.
PayPal Here was initially geared more toward mobile payments than storefront purchases, said Carolyn Groobey, vice president of business products. In March, PayPal introduced an app for the iPad, which can be bundled with stands that connect to a cash drawer and receipt printer.
“With the iPad app, we're now able to target more storefronts,” Groobey said.
The company's mobile payment transactions are rapidly growing. Last year, PayPal handled nearly $14 billion in payments on mobile devices, up from about $4 billion in 2011, according to the company.
Groupon joined the fray, expanding its Breadcrumb POS program, which became available to all businesses in mid-May. The company previously offered its iPad-based cash register only to restaurants and bars.
Tablet-based cash registers are years, possibly decades, away from entirely replacing registers as we know them, said Seth Harris, founder of Breadcrumb, which was bought by Groupon in 2012.
“I don't think cash registers are going away tomorrow, but as more and more consumers get plugged in, it's going to be necessary for business to adapt,” Harris said.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Chevron settles fatal well fire lawsuit for $5 million
- Task force to plot ways of easing gas glut in Pennsylvania via pipelines
- IRS cybersecurity breach touches lives of homebuyers, others
- Pitt study suggests health law attracting young to balance insurers’ risks
- Shoppers pay premium for organic chicken
- UPMC offering buyouts to 3,500 employees in cost-cutting move
- Many Americans have no retirement savings, Fed survey shows
- Automakers do U-turn on infotainment systems
- Beaver Valley nuclear reactor returns to service
- This robot is cute, artificially intelligent and employed
- Apple finds bug that causes iPhones to crash