October 23, 2015
Yesterday Verifone announced a next generation family of payment devices, called Verifone Engage. Verifone promises to wrap more value around the merchant-consumer interaction at the point-of-purchase with new personalized marketing features, pay-with-points and rewards. In addition, they introduced an expanded Verifone Commerce Platform giving developers the tools to publish POS apps to a new App Marketplace for merchants. They Linux based devices will provide an accessible and well-known framework for developers to innovate upon. Software based solutions are transforming the industry and Verifone risked getting commoditized as a hardware vendor if it didn’t act by building a platform and marketplace for developers.
What does this mean for the rest of the Payments Industry? Two stakeholders in particular will be impacted.
POS Developers (ISVs) – Engage is a good development for the POS developer community and merchants. The whole mission of a POS is to improve the customer experience at the point of purchase and streamline back-office processes for the merchant. ISVs could integrate with Engage hardware and offer merchants more services through the Verifone App Marketplace, publish apps of their own, and potentially earn new residual revenue sources from merchants paying to use those applications.
- Processors could potentially choose to enable ISVs to integrate to them via the Verifone Commerce Platform creating a more seamless “commerce” integration experience. They do this today to a certain degree through Verifone Point, but the Verifone Commerce Platform promises to enable much more. This would be a potential boon for Verifone and ease the burden of multiple integrations for ISVs allowing them to focus on their core business of POS development. Payment gateways or processors could have apps in the marketplace enabling merchants to sign up for payment processing creating a more frictionless on-boarding experience.
Payment Processors – Many processors have long-standing partnerships reselling Verifone devices and promoting Verifone’s Secure Commerce Architecture (SCA) as an integration methodology to ISVs. Processors have their own developer platforms and programs that help streamline the payment integrations, and many have hopes of expanding it beyond just payment processing APIs into other commerce functionality. In my own conversations with Verifone they have no intentions of disrupting processor-developer relationships, and it is unlikely any single player in the ecosystem can be the central hub for developers in the near-term. Verifone and its processing partners will need to tread carefully to ensure they are not reducing relevancy or unintentially disintermediating established relationships with the developer community.
Yesterday’s announcement makes it clear that developers and technology providers in the payment space are gaining additional influence. The power-broker in this new world order is the software developer who is not only the "technical connector" of APIs, but also the dreamer and engineer of new consumer payment experiences. To this end the industry needs to raise its efforts in supporting developers.