Smart card payment terminals go mobile to tap into emerging markets
The underlying message delivered by a vast majority of the exhibitors was of course their capability to secure data and payment transactions, and mobile payment terminals were definitely the new kid on the block.
All established POS vendors had a mobile merchant version on display, often a mock-up device still under development or ready for commercialization sometime next year. But what’s so special about MPOS (mobile point-of-sale) when NFC-based mobile phone applications have already been demonstrated for direct smartphone-to-smartphone secure payment transactions?
Well, the argument here is that there are many more banking card holders than NFC-enabled smartphone owners, especially in emerging countries where smartphones are still a luxury item. Even in Europe, if using NFC may well catch up for certain applications like transport, the use of smartphones in place of contactless smart cards is not widespread. Then only a fraction of NFC-enabled smartphone owners are fully aware of their phone’s new capability, and they would still have to queue for the cashier to swipe their phone onto a contactless pad.
What’s more, in Europe at least, NFC-based transactions would be limited to fairly small amounts. Unrestricted credit card transactions for chip cards are only authorized through PIN entry devices (PED) that comply with the current Payment Card Industry’s (PCI) Data Security Standard (DSS). The PCI PED standard imposes particular security requirements for the keyboard, the chips and architecture being used and the display of the PED, which justifies the emergence of PED-enabled MPOS solutions.
Until everyone on earth becomes well acquainted with their smartphones, and before smart cards disappear themselves, there will be a growing market for secure card readers that can accept any type of banking cards (magnetic stripe or chip-and-pin) and connect directly to a merchant’s smartphone, forming a completely mobile point-of-sale system, without requiring a costly cashier infrastructure.
This is precisely where the Italian startup Jusp (short for JUSt Pay) aims to play. Founded two years ago, the company has developed the Jusp card reader, a unit that can connect via a mini jack audio lead to any smart device and accepts all major chip-and-pin credit cards. Measuring about 5cm per side, the square device is what the company claims to be the world’s smallest mobile POS system and the most compatible because it doesn’t rely on Bluetooth to communicate with the smartphone.
Launched at Cartes, the world’s smallest credit card reader from Jusp.
The company has also designed adaptors for Jusp to fit various smartphones and tablets brands, enabling merchants to choose their communication platform. What’s more, at only €39.00 Jusp is very competitively priced, less than half the price of other MPOS solutions, the company claims. It is also an order of magnitude cheaper than traditional behind-the-desk POS systems where activation costs and monthly fees add up to the merchant’s business expenses.
Part of its business model, Jusp will take a 2.50% commission on each transaction, again claimed to be the lowest in Europe. Emerging countries where small mobile merchants abound are the key growth markets for such MPOS solutions, but the company also says the tiny portable unit could be used by sales-assistants to capture impulse-buying customers before they change their mind or before they give-up queuing.
mPowa, a direct competitor in this new market, was showcasing a Bluetooth-connected MPOS in a neat 62.5×62.5x16mm case, ready to be commercialized in January next year. The device which also accepts swipe and chip & pin credit cards took the company two years to develop. When asked why traditional POS vendors would not be first to come up with this solution, the answer from a marketing spokesperson was a sharp “Total lack of foresight!”, maybe the truth is more about maintaining high profit margins on cashier-based POS solutions while avoiding self-cannibalizing their own market with low-cost mobile solutions.
A poster illustrating the benefits of mPowa’s white-label MPOS solution.
A European distributor for POS and payment solutions, German company PCP (Products for Card Payments) launched its own product at the show, dubbed Tiny Blue, a MPOS unit measuring 88x68x22mm and featuring all the right security certifications (PCI-PTS/SRED, EMV L1, L2). The company sees potential growth both in new markets created by mobile merchants, and in traditional POS circuits as a lower cost and more mobile replacement solution.
Tiny Blue, a MPOS unit by German company PCP (Products for Card Payments).
Just to follow the trends, some more established vendors like the Korean POS manufacturer Bítel for example, also displayed mock up solutions, still in the design stage. With its iCM unit measuring 116x68x14mm, well-known POS manufacturer Ingenico is also keeping a close eye on this market. Indeed during the show, a designer from Ingenico took a keen interest at Jusp’s offering, acknowledging that their solution must have been tricky to design in such a compact form (less than a third the size of Ingenico’s implementation).
While it is assumed that these new MPOS solutions could rely on off-the-shelf certified secure chips already commonly used in the smart-card industry (most would not disclose what was inside), Ezetap Mobile Solutions’ CTO and Co-Founder Bhaktha Keshavachar (from Bangalore, India) was keen to exhibit his mobile POS unit on Maxim Integrated’s booth. With the 78x45x10mm certified Ezetap unit, Keshavachar is ready to go to market, first in India, with plans to expand globally.
Built around Maxim Integrated’s USIP-L (the small black chip), the Ezetap MPOS unit connects to smartphones either through their audio-jack, USB or Bluetooth.
Although Maxim Integrated had not officially announced it, for such compact designs, the company has taped out a trimmed-down version of its DeepCover Secure Microcontroller, USIP Professional IC, dubbed USIP-L for Lite. Offering the same level of security around a 32-bit RISC core (MIPS32 4KSd), but fewer peripherals (none for printers), the USIP-L chip comes in a 8x8mm package instead of the regular 15x15mm offering. For 2014 the company plans to keep the package size but integrate further functionalities.
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