The Scope for Self-Service

Version imprimable

Wherever there is a customer, plus a product or a service, there is an opportunity for an unattended sale. Extending kiosk appeal with more secure, convenient and interactive platforms will encourage retail, ticketing, fuel, transportation, banking and entertainment companies to invest; driving unprecedented growth across Europe.
 
By Tony Saunders, Marketing Director, VeriFone.
 
According to Summit Research Associates, the worldwide kiosk installed base is expected to reach 1.9 million by the end of 2010 and 2 million in 2011. With an installed base of 321,000 kiosks, European deployments represent 18% of the global market – making Europe the second-most populated region in terms of kiosks.
 
At VeriFone, we believe that, until recently, European uptake was hugely restricted by lack of secure, convenient card payment technology – but things are changing. And fast.
 
Security Increases Diversity
 
The introduction of secure EMV-certified verification to unattended terminals is at last providing a reliable method of verifying self-service cardholders and freeing merchants from the worry of excess liability.
 
In the UK, large supermarkets have successfully utilised self-service checkouts to cope more easily with peaks and troughs in demand, satisfying customers’ desires for convenience and reduced waiting times.
 
Retailers report that all customer segments and demographics – from the elderly to younger and more IT-literate customers – are embracing unattended and self-service options enthusiastically.
 
Within Europe’s parking sector, chip and PIN card-activated meter and device roll-outs look set to increase as inflation-driven prices make carrying coins impractical. In Belgium, Germany and the Netherlands, consumer familiarity with e-purse transactions at parking meters and vending machines is also smoothing the shift to self-service payments with EMV cards.
 
EMV is also changing the face of vending machines. No longer limited to low-value payment transactions, these bastions of convenience are now frequently being used to dispense high value goods such as mobile phones and MP3 players.
 
But it doesn’t end with EMV. In May 2010, the council that administers the PCI Data Standards released the guidelines that stipulate what vendors of payment card devices will be required to incorporate into their products. The new requirements are designed to bolster security on retail point-of-sale card readers, unattended kiosks and payment terminals, such as those found at airports and gas stations.
 
As an invited member of the PCI Security Standards Council, VeriFone is committed to supporting merchant education around PCI DSS and PCI PED compliance. All VeriFone’s unattended payment modules offer the highest degree of PCI and EMV Level 1 and Level 2 Type Approvals for on-line and off-line PIN entry. This includes an approved encrypting PIN pad (EPP), PCI approved Secure Card Readers, and data encryption between the EPP and Secure Card Reader.
 
Contactless Convenience
 
In addition to EMV, contactless cards are also driving kiosk growth. Already there are 16 million PayPass cards being used at more than 56,000 merchants in 19 countries. According to Frost and Sullivan, the global contactless payment card marketplace has grown to almost 1% of all card-accepting merchants, and roughly 3.5% of all general purpose payment cards.
 
Looking ahead, IMS Research forecasts that the number of locations accepting contactless payments will increase by over 12.5 million by the end of 2013. IMS also suggests that the number of contactless-enabled points of sale in existence will grow more than six times faster than the overall EFTPoS market.
 
As customers move from cash to card, the opportunities for unattended applications become immense. Systems such as Transport for London’s Oyster card are already successfully familiarising users with the convenience of ‘tap and go’. The trend to deploy transport and contactless payment small-value payment transactions – below $25 in the US, 25 Euros in the Euro zone and £15 in the UK – is also helping to propel contactless payment into a variety of retail environments, including fast food, local convenience stores, sandwich and coffee shops, pubs, taxis, etc.
 
Adding contactless payment to the PoS offers significant advantages for quick-service restaurants, supermarkets, petrol stations and other establishments where speed and convenience are crucial to maintaining customer loyalty and maximising revenue during peak hours.
 
In terms of deployment, existing PoS devices can be easily modified – VeriFone provides contactless readers as a modular add-on for existing EFTPoS devices.

 
Multi-Media Drives Appeal
 
The latest touch screen unattended devices combine a secure payment solution with a powerful multimedia delivery platform capable of delivering highly targeted branding, cross-line promotions, as well as advertising at the PoS.
 
Consequently, kiosk and unattended payment devices are fast becoming vital components of multi-channel retail strategies. Retailers are embracing unattended technologies to deliver an improved in-store experience that drives consumer loyalty. Merchants are also utilising unattended to deliver revolutionary merchandising programmes that leverage new revenue generating partnerships.
 
Equally effective is the technology that Time Magazine recently named as one of the 10 most prominent technologies to advance over the next 10 years: digital advertising.
 
According to figures featured on CNN from research specialists IMS, the digital signage advertising market reached $3.9 billion last year, and is expected to grow strongly. Indeed, industry research leader Frost and Sullivan states that although digital advertising slowed from its pre-2008 25% growth rate, the industry maintained a more-than-respectable 10% growth throughout the recession, before going on to predict that this figure would increase to 15% this year and 20% by the end of 2011.
 
Kiosks also enable retailers to deliver a wide range of product information, including price, size and colour choices, technical specifications or upgrade options, and even to offer purchase recommendations for a range of related items.
 
This virtual sales assistance approach is proving popular with consumers, and current research confirms a higher-than-average consumer spend in unattended payment scenarios. It is also opening the way to the emergence of unique co-branding sales partnerships, where global product brands leverage brand recognition to cross-sell products or services from new or local merchandising partners.
 
Profits and Potential
 
As retailers, fuel and transport organisations and businesses strive to maintain competitive edge and market agility, they cannot afford to ignore the tangible benefits of modern interactive, self-service devices and applications.
 
With secure payments, high resolution VGA screens and sophisticated real-time network management capabilities, merchandisers can maximise kiosk deployment and drive customer-facing offers or promotions on a country, region or city location, pinpointing delivery of offers or price options to specific customer profiles and ensuring even greater returns on their investments.
 
At VeriFone, we are here to help guide them through the process. We provide the industry’s most secure and effective unattended solutions and offer support through testing, implementation and ongoing operations.
 
Our complete unattended programme includes training, consulting, professional services, documentation and support – everything merchants need to extend unattended services into new, and as yet untapped, locations and markets.