Payments Leader

Is POS Headed to the Graveyard? – by Dan Brames

February 13, 2018

Dan Brames, FIS | Head of Retail and Corporate Payments

Large sums of money have been applied to securing and speeding up payments at the point of sale – implementation of EMV and investment in NFC, for example. Juniper Research predicts that more than half of global transactions and one-third of U.S. transactions will be contactless by 2022, requiring more investment in POS technology.

It’s critical for merchants to be compliant, to secure customer data and to keep their checkout lines moving, but how much more should they invest in POS when the customer journey outside of the store walls is expanding rapidly?

Payment action headed outside the box

Growing numbers of transactions now occur outside of merchants’ physical facilities. Online sales continue to experience double-digit year-over-year growth (YOY), outpacing overall retail sales by more than three to one during the recent holiday season. BOPIS (buy online, pickup in store), mobile-order and order ahead with curbside delivery are quickly gaining speed in adoption.

Research conducted just prior to the 2017 holidays found that 58 percent of consumers planned on using BOPIS fulfillment for holiday shopping to save on shipping (two-thirds) and time (53 percent). Retailers such as Best Buy and Macy’s aggressively promoted last-minute BOPIS during the holidays to gain as many sales from procrastinators as possible. However, a recent study by W.D. Partners shows that, overall, retailers have yet to execute BOPIS in a way that satisfies consumers.

Order and pay ahead with curbside pickup at grocers such as Kroger, Walmart, Publix, and drugstores such as CVS offers the convenience consumers are demanding while defending market shares against competitive threats.

Sales through mobile order ahead at quick service restaurants (QSR) are surging – estimated to grow at 57 percent annually through 2020. According to Starbucks, 10 percent of its transactions now come from its Mobile Order and Pay app feature.

Investment moves away from stores

Online shopping, store closings and transformation of stores into showrooms or fulfillment centers has changed the retail landscape and has brought store rollouts to a halt. At the same time, merchants are scrambling to accommodate tech-savvy, time-poor shoppers.

That’s left many merchants unsure of whether to invest in the next best POS terminal or to apply resources and investment to the technology that facilitates online retail and other “outside the box” customer journeys. So which option offers the best ROI over the next three to five years?

It is worth considering that most merchants could potentially stand a better chance of capturing more revenue by accommodating shoppers who want to order and pay ahead. This option – which reflects where much of the consumer traffic is heading – allows merchants to meet consumer needs for convenience and saving time while also maintaining their business at the POS.

Who can help? Most merchants lack the internal resources to develop order and pay ahead capabilities, but, their processors can help. It’s time to open the discussion about facilitating remote transactions for all merchants to be better aligned with where consumer preferences are headed.


Dan Brames

FIS | Head of Retail and Corporate Payments

Dan brings over 20 years of financial and payments industry experience to FIS through senior marketing and management roles. Most recently, he was a management team member at Valutec which was acquired by Metavante in 2007 and FIS in 2009.