(Original post)

In-store payment technologies are advancing rapidly. New, intelligent solutions bring ease to consumers but can also improve your business's cost structure, sales performance, and security. 

Traditional sales setups in physical stores combine multiple pieces of hardware and software. The hardware includes a cash register, a PIN entry device, and possibly additional gadgets like computers, screens, and tablets. The associated software accepts and processes transactions, limited to simple payment features. 

Smart point-of-sale (POS) solutions are new-generation sales setups that combine all needed hardware and software into a single device. They also have unlimited access to advanced business applications – explicitly created for different types of ventures. 

Smart solutions rely on an online PIN, which eliminates the need for customers to insert their card into the payment terminal – regardless of the purchase amount. Finland joined other Nordic countries in adopting this system at the start of 2024. As a result, companies that rely on physical payments can now gain a competitive advantage by implementing smart POS in their locations.

Old payment terminals expire in April 2024

Most traditional payment terminals in brick-and-mortar stores are currently version 4 devices (PCI PTS POI v4). These devices are only certified until 30 April 2024, and no new version 4 devices, such as PIN entry devices, unattended payment terminals, or secure card readers, can be purchased after April. Although you can remain using expired terminals, the next-generation devices (version 5.0 or higher) are already advised in case of new deployments or end-of-life device replacements.  

However, there are plenty of reasons apart from updated standards that drive businesses towards updating their point-of-sale solutions. This article clarifies why you should consider shifting to smart devices sooner rather than later. The most prominent reasons include:

1. Cost savings
2. Sales performance
3. Improved customer experience
4. Security standards

Lower the costs of your business with a smart point-of-sale solution

Smart POS solutions offer a future-proof way to create cost savings. Despite the initial investment, you’ll end up both saving money and driving sales with your new devices.

Smart POS allows you to keep tabs on your inventory in real-time. Combining supply data with your sales analytics will enable you to anticipate volumes, eliminate wasteful warehousing costs, and streamline processing. You’ll also be more agile in keeping up with your product information and catalogs. 

As your smart point-of-sale solution is cloud-based, you can rely on any Android device for your transactions and sales management. You can even use your phone. The flexibility eliminates the need for multiple devices with individual purposes.

As your devices age and expire, they won’t eventually be eligible for point-to-point encryption (P2PE). Encryption is still available for expiring terminals, but the newest P2PEs are all created for non-expired devices. Although P2PE is best known for its security features, it’s also a great way to reduce the cost of handling your payments. Point-to-point encryption minimizes the scope of your mandatory compliance, as it separates the customer’s card data from your POS solution and network. This means less documentation, less administrative work, and fewer management hours. 

Point-to-point encryption will completely stop supporting the expiring devices by Spring 2029. Although your devices can still be used in a compliant manner afterward, you’ll lose all the abovementioned scope reductions, and thus your cost savings.

Smart POS also takes care of the remaining compliance requirements on your behalf, meaning you can reduce time spent on audits and keeping up with the changing safety provisions.

In most scenarios, the cost savings created with smart solutions quickly make up for your investment.

Use your smart POS to improve sales performance

Smart POS solutions offer multiple tools for improving your sales performance. 

As smart POS solutions provide real-time data on your sales, they can offer you cross-selling and upselling suggestions. You can utilize these suggestions for optimizing your marketing or, e.g., improving individual sales rep performance. 

A smart solution also helps you optimize your sales strategy by staying on top of product performance, high and low seasons, and trends. A smart POS’s inventory management tools enable automated reordering, meaning you won’t miss out on sales opportunities with out-of-stock products. You can also create and track unlimited reports and key performance indicators with your smart POS to keep you up to speed with your specific business goals. 

Create effortless customer experiences with smart POS

A smart point-of-sale solution should also be considered when trying to elevate your customer experience. With a smart POS, payments are versatile, effortless, and fast. You can accept payments with any Android device anywhere, so whether running a SUP rental, a cupcake pop-up, or a big warehouse sale, you can effortlessly process payments indoors and outdoors. Some examples we have encountered with our clients include seasonal shops, services requiring payment in advance, such as accepting a driving test, and, paying at delivery, such as with courier services. In busy seasons, you can easily add checkouts to your locations with smart POS to minimize waiting time. 

Attaching your loyalty program to your smart point-of-sale solution will provide the most effortless customer journeys. With access to your customer’s online and offline purchase history, you can create targeted offers, personalize the shopping experience, and ensure that the different channels in your customer experience are a seamless match. 

As smart solutions begin to enhance physical locations, they allow you to get closer to the optimized experiences and journeys your brand currently curates online. Furthermore, the modern design of the payment terminal will readily match the overall experience and customer journey you’re trying to create at your location. 

Keep up with the latest security standards

Global payment security is controlled by a universal institution, the Payment Card Industry Security Standards Council. In addition to setting standards and requirements for card payments globally, they provide valuable resources and best practices for companies needing standard-meeting products and solutions. You can take a look at all of their resources here.

The newest versions of smart POS, such as version 6.x of PTS POI devices, are currently the most effective in avoiding attacks by malicious parties. Hackers and other criminal bodies trying to defy cyber security constantly develop new, innovative ways of stealing sensitive customer data during transactions. 

PCI works together with the industries it affects, and because of its collaborative nature, it has already extended its expiration date for the PCI PTS POI v4 payment terminals once – by one year to 30 April 2024. 

With the newest devices, you ensure that your customers’ payment data stays safe.

Qvik is a company that creates lovable consumer products that bring commercial success to our clients. One of our fortes is our constantly evolving expertise in advisory, payments, and monetization. With digital business advisory, you can change your product’s uncertainties to certainties and drive profitability. Our services include, e.g., payments and loyalty consulting, business design, authentication advisory, and technology strategy. If you have any questions, don’t hesitate to get in touch below.

Sources and further reading

Did you enjoy this article? Take a look at our other payment-related resources here.

Sources:

• Suomi liittyy Online PIN -maiden joukkoon
• PCI Security Standards Council
• Protect Payment Data with Industry-driven Security Standards, Training, and Programs
• PCI Security Standards Council Bulletin: Expiry Date Extended for PCI PTS POI v4 Devices
• PCI-validated Point-to-Point Encryption (P2PE) FAQ
• What Are the Ways to Reduce PCI Scope
• The Benefits Of Upgrading To A Smart Point Of Sale Terminal – Virtual Pay
• Implementing smart point-of-sale solutions
• How Retailers Can Boost Sales with a Smart Point of Sale (POS) System | by Syscraft | Medium
• SmartPOS: Reinventing the user experience with an innovative device – Payplug
• P2PE Security Requirements and Testing Procedures

AUTHORS:

Mikko Vahter

Advisory and Payments

Qvik

Sami Nurmi

Senior Consultant, Payment Solutions

Qvik