Payworks doubles down on in-store payments

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Point-of-sale (POS) software provider Payworks has rebranded and launched Pulse, a cloud-based processing infrastructure to enable in-person payments acceptance that it calls “next-generation payment gateway technology.”

The product, which provides a processing solution pre-certified by multiple major players, will make it easier for merchants to integrate in-person payments. Payworks is also offering Accept, a white-label mobile POS (mPOS) solution, and Engage, a customer engagement and analytics tool, alongside Pulse. Major processors, like Barclaycard and Stripe, are already connected to Pulse, according to the firm.

Pulse's product highlights a few key trends in the payments industry. 

• Physical sales still represent the vast majority of US commerce. Payworks believes that development in the physical POS space has stymied because of focus in the high-growth areas of e- and m-commerce. But physical sales still comprise over 91% of total US retail sales. And though digital and mobile integration are rising faster, the number of merchants accepting in-person card payments increased to 54%, up from 46% five years ago. Simple solutions like Pulse could appeal to smaller, online-only merchants looking for a simple way to expand into in-person payments. And this is a segment Payworks is already targeting, as illustrated by its partnership that offers hardware and POS platforms to select merchants from digital gateway Stripe. 
• It could also bring in customers looking for an easy way to accept the latest payment technology. Merchants have been hesitant to upgrade to EMV terminals in particular because of the expense associated. And once those merchants do upgrade, it’s often a time-consuming and complex process to certify and activate terminals so that they can begin accepting chip card payments. The easy-to-integrate pre-certified solutions that Payworks offers could appeal to merchants looking to avoid the hassle of EMV integration but wanting to enable in-person payments, which could help the platform drive customers to the firm. 

Thanks to companies such as Payworks, mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

Evan Bakker, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

• In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.
• Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.
• Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:

• Forecasts the growth of US in-store mobile payments volume and users through 2020.
• Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.
• Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.
• Addresses the key barriers that are preventing mobile in-store payments from taking off.
• Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

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