NextGenPOS to Cash registers are what PCs were to Typewriters

One could say that NextGenPOS in the form of a tablet on a counter is just replacing “low-tech” cash registers with affordable mobile devices. But that would not do it justice because NextGenPOS gives small and medium sized merchants (SMEs) enterprise-grade functionality. So in many ways, NextGenPOS acts more like an affordable version of PC-POS but with a sleek and modernised user experience.

  • NextGenPOS gives SMEs enterprise-grade functionality 

In addition to functioning as an affordable PC-POS for SMEs, NextGenPOS doesn’t have the constraints of the PC-era and has been designed specifically for mobile devices. For example, instead of software licenses and costly installation procedures, NextGenPOS providers typically offer SaaS models with its flexibility, affordability and distribution through iTunes and Google Play (sorry Mr on-site POS technician, computer automation just ate your job). Then almost all NextGenPOS systems also leverage the cloud for heavy work, back-end functionality and data storage.

  • Similar to typewriters turning into PCs, NextGenPOS is a giant leap from cash registers 

NextGenPOS is fundamentally an evolution at the point of sale. Before cash registers, there were cash drawers and abacuses. Then, cash registers were invented and they proliferated the industry. As retailers expanded and required more data, the larger ones could afford to pay for advanced PC-based systems (PC-POS) but most SMEs could not meet such an expense. Now with NextGenPOS, the SMEs can suddenly afford to get enterprise-grade functionally to help them run their business.

Eventually all SMEs will replace their cash registers with NextGenPOS and be able to utilise data to improve their management of stock, customer retention and revenue. That might take a decade to happen. Although, after NextGenPOS proliferation, some other system will inevitably be brought in to disrupt the industry. Such is the evolution of POS.

Fixed and mobile check-outs

The cash register of the future, and that future is now, is designed to be both fixed and mobile at the same time — and that is a part of the evolution of POS into #NextGenPOS.

Traditional cash registers and PC-POS systems are almost as mobile as glaciers, and onewouldn’t think seriously about carrying them around. But once you have a POS system that is primarily made up of a Wi-Fi-connected mobile device, it is silly not to take advantage of the mobility of it and that is exactly what we are beginning to see.

I have always found the whole concept of the store counter a bit bizarre. Its existence stems from earlier times of market stalls and over-the-counter sales when theft was perhaps a bigger problem than today. The problem I have with the “counter” is that it almost acts like a psychological barrier between the customer and the retailer. Once a customer is standing in front of it, he has already made that important decision to buy something and the retailer certainly does not want to change that decision. Retailers spend a lot of money and effort in location, advertising and promotions in order to attract customers to their stores, and once they have managed to do that there is another massive effort within the store itself (design, layout, product selection, customer service etc.) to convert that customer-visit into a sale — so why on earth would anyone want to build a barrier, i.e. a counter, between that dedicated customer and the sale?!

To make things even worse, retailers put an even bigger barrier on top of the counter: a big, bulky cash register or PC-POS. In some stores it is actually hard to see the cashier at all, as they are hidden behind a wall of screens and (empty) plastics. It is almost as if to say to the customer: “are you really sure you want to go ahead with this purchase?”.

Checkout counters are often relatively large, even in small convenience stores, but for whose benefit: the customer’s or the retailer’s? Bagging, de-tagging and payment is important, but there are other ways of accomplishing them. Despite customers being used to this interaction, and cashiers likely finding this more comfortable, it is not necessarily best for business.

One way to go about changing this is to have no fixed counters in the store, which is what Apple has famously deployed. Although it can sometimes be a little confusing and seemingly disorganised when their stores are busy, they probably do not experience many “walk-outs” due to long queues…as you don’t see them.

The ‘mobile POS vs fixed POS’ can work well when the processes are carefully planned. However, this is the case only in retail stores, where the customer’s basket consists of few items of high value as opposed to many items of low value (such as in a supermarket). For many merchants it might not make sense to only mobile counters, but they should consider combining both fixed and mobile checkouts.

Obtaining the ability to re-use the same system on the counter as well as on the shop floor can be very cost-effective. The technology is already available to achieve this. Yet, it is first and foremost the internal processes which must be well thought through. With NextGenPOS replacing so many traditional cash registers, I am sure we’re about to see much more of “advanced” checkout processes.

The Confusion in Payments

I usually tell new employees at Handpoint that it takes about six months to understand payments and that they shouldn’t be overwhelmed by all the acronyms and abbreviations. That is a lie actually, as it takes forever to understand payments. In fact, I have not yet met a person who fully understands payments (down to the the nitty gritty details) – I certainly don’t after over a decade in the payments business (yes, I’m that thick). Every month I’m learning something new; from the current infrastructure, ecosystem as well as new solutions coming to market and I’m fascinated about it all (sad, I know).

When people pay with their credit or debit card (or their phone) they’re not particularly interested in what happens behind the scenes, and why should they be! People just want the process to be quick and end with “Accepted” instead of “Declined”. We, payment professionals, however are fascinated about the process behind it, and it is really amazing that one can pay for goods and services anywhere in the world and instantly pull out money in any currency from ATM. It might be an old system, but it sure works.

It’s been a hobby of mine to understand both the payment ecosystem as well as the technical process behind it, in details. I’ve been asking payment professionals from within all aspects of the ecosystem to explain it to me (and I meet a lot of people in the industry), but so far I haven’t come across a single person who can explain it to me in details. Yes, of course they know the highlights but not the full details from A to Z. Scary, isn’t it!

There is so much happening in #fintech and payments today but there is a lot of confusion and miscommunication about it all. We see start-ups fail (and many more will), as they don’t understand the technology, as well as billion dollar companies blunder tons of money because they don’t understand the ecosystem. And yet, in all of the mess, there is this hope that something big, something revolutionary will come out of it. Some even (wrongly) predict the end of banks. Whether a payments geek or not, that has to be interesting enough to pay attention to; better still, to make a bet and have a stake in the game.

What is #NextGenPOS ?

We used to call it “mobile POS” because it was essentially a MOBILE Point of Sale solution. But these days mobile POS often takes the form of a tablet fixed on top of a counter – which isn’t very mobile at all but still leverages the same basic technology. What we are witnessing is another example of mobile devices acting as a swiss knife, taking over more and more functionalities, and in this case the Point of Sale.

The mobile is doing to the PC what the PC did to the mainframe” @russellbuckley

Historically Mobile POS originates from the airline industry where space constraints required a full-blown mobile retail checkout system. In the absence of mobile devices these solutions were based on bulky handheld terminals (running PalmOS and WinCE). The technology proliferated the transportation industry and was then famously adapted in a retail stores by Apple – changing the whole retail checkout process. A lot of retailers wanted to imitate Apple with a “queue busting solution” as it was called back then, but very few succeeded.

What has since happened is that smartphones have replaced handheld terminals and the old cash register is giving way to new technology, namely tablets with integrated payments (instead of stand-alone payment terminals). This new technology, easily available to merchants through iTunes and Google Play, gives merchants many more features over the traditional cash register (reports, inventory, analytics, loyalty…) and helps them run their business. In other words, POS systems using mobile devices are advancing the industry and therefore we collectively call them: “Next Generation POS”.

Next-Gen-POS = {Tablet POS, iPad POS, Mobile POS, mPOS, queue buster…}

Yesterday is never coming back and neither is yesterday’s technology (thankfully). Most industries see some technological advances every year and checkouts and payments are no exception to that rule. Cash registers brought huge benefits to merchants when they were introduced and have been greatly successful. Now we’re seeing another type of technology replacing cash registers and that wave will take many years to fully peak…at which time we’ll probably advance to something very different…the After-Next-Gen-POS!…but until then, we’ve got plenty of work to do.