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Tuesday, December 18, 2012

Sail Fail May Flag SOS for Mobile POS

A mere seven months after its launch, VeriFone has decided to sink Sail, the company's mobile payment-processing solution for small merchants. That could signal the start of a mass exodus from the mobile point-of-sale market, especially those solutions designed for small businesses, according to Mobile Commerce Daily.

The cadre of mobile solutions providers grew rapidly in the last year or so, in the belief there was a reservoir of untapped potential in the many thousands of small merchants out there who can't afford the more elaborate and expensive solutions.

The scaled-down solutions were welcomed by such merchants. Sail, like its better-known competitor Square, was easy to use: The merchant simply attached a small device to a cellphone in order to take credit and debit cards away from a cash register. The service enabled a mom-and-pop cafe, for example, to quickly process payments at outdoor tables or a college bookstore to sell sweatshirts from a tent at football games.

However, as it turns out, a lot of smaller businesses don't do all that many mobile sales transactions, at least not yet. The reasons vary, although one problem is that mobile POS isn't always compatible with merchants' primary systems. In order to manage inventory and run reports, merchants must manually enter mobile transaction data into the main system, something most smaller sellers don't have time to do.

That means there's not enough profit for all solution providers, and some will probably choose to follow VeriFone's example and get out, or else sell out. The consolidation will leave fewer choices for small businesses and maybe higher costs.

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