Cash in: the mobile revolution

The payment industry is constantly seeking to offer new options to professionals in terms of cash in. Today, there are many different ways to accept payment, from cash to credit cards. Many concepts are now emerging to make cash in more flexible and mobile.

Changes in the field of Payment Terminals

One of the most important milestones in the French payment market was the creation in 1974 of the first smart payment card. This payment method, which was revolutionary at the time, allowed customers to pay for their purchases without using cash, while benefiting from the security provided by the 4-digit secret code that was implemented a little later in 1990.

In order to accept these card payments, merchants have had to equip themselves with an Electronic Payment Terminal (EPT), a device that receives customers’ bank cards. These terminals have a slot where the card can be inserted, a keyboard allowing the customer to enter his code and the merchant to have access to different functions. The first models of these Eftpos terminals depended on their connection to the Dial-up Telephone Network (PSTN) in order to transmit the information from the Eftpos terminal to the bank concerned.

This PSTN connection is becoming obsolete, strongly competed by new communication means such as Bluetooth, Wi-Fi and mobile networks (4G). Technological advances have strongly influenced the field of POS terminals, which are continuing their revolution to adapt to these new ways of cashing. Traditional hardware POS systems, although widespread, could eventually be replaced by software POS systems, which are less expensive to maintain and more flexible. In anticipation of this transition, the Worldline group, which has acquired the POS manufacturer Ingenico, is currently considering the future of this activity.

One of the remarkable aspects of this transition is the importance given to the mobile aspect of the cash in process. Gone are the fixed POS terminals connected to the PSTN network and unable to be moved: POS terminals are mobile and adapt to the available means of communication. This is how mobile POS terminals came into being, operating on the mobile network and therefore able to be used on the move (on the terrace for restaurant owners or for cabs and other street vendors, for example). This mobility goes further, as retailers are also exploring the possibility of equipping their sales staff with mobile equipment (tablets or phones), to enable them to accompany their customers more fluidly in the store. Finally, many small retailers are also equipping themselves with software terminals on their smartphones.

Cash in has many faces nowadays. In the past, it was entirely cash-based, but today it is adapting to the different ways in which customers can pay for their purchases. In the context of the COVID-19 health crisis, the need to find different method of cash in for merchants is felt.

Newcomers in a context of crisis

These new innovative means have been designed by FinTechs eager to make a place for themselves in the world of payment following the opening of financial flows, allowing other establishments than banks to process them. This has led to new types of payment terminals called mPOS (Mobile Point Of Sale), which are more compact and less expensive than their predecessors. They are now adopted by all, including banking players, as recently demonstrated by La Banque Postale.

These small boxes fulfill the role of a classic terminal, although they work a little differently. The main arguments for the various mPOS offers are low acquisition costs and ease of acquisition. Traditionally, the merchant has to contact his bank in order to start the procedures to open a direct debit, procedures that can last from 3 days to one month. With mPOS, these procedures are shortened and allow the merchant to have quick access to the device and its back-office management tools. In addition to being quickly accessible, mPOS have a lower purchase price than traditional POS devices. By charging a transaction fee, these mPOS systems often compensate for their low purchase price, as well as the lack of commitment they often allow. With fewer features than some more traditional POS systems, mPOS are deliberately minimalist in order to be easy to use.

Another major player has entered the world of cash in: the smartphone. More than a simple means of communication, it is now a tool with complete and varied functionalities, such as WeChat Pay or Alipay in China, applications that centralize almost everything that can be done on a smartphone. Some FinTechs, such as Easy Transac, want to exploit the potential of smartphones in order to make it possible to collect money. NFC technology for contactless credit card transactions is integrated in recent smartphone models, making it easier to design cash in solutions on this medium.

Finally, we can mention the explosion of e-commerce, which has allowed merchants to cash in their customers without having to be in store. These two means adapt perfectly to the current health context by allowing transactions to continue even without physical stores open. Consumers around the world are now accustomed to making purchases on the Internet.

The flexibility provided by these new means of cash in is gradually convincing more and more merchants, eager to adapt to the new consumption modes that have emerged in parallel with the health context. It was imperative for these merchants to find other ways to make sales, all at a lower cost. Even though some of them were and still are reluctant to change their cash in systems, the impact of Covid has pushed many of them to consider these new options in a sustainable way.