The Case for a semi-integrated payments architecture for retail - cross between manageability and driving innovation.
Retailers have long struggled with electronic payments especially when coupled with creating a unified consumer experience at point of sale or service. It would be safe to say that of the last 30 years of card based payments only the last 6-8 years have really seen retailer specific challenges which transpire across issue like BYOD, tokenization, multi-channel, security, regulation, acceptance, authentication, innovation and the fundamental principal of manageability of payments.
When I speak to retailers, one of the most common issues that come up is that of the manageability of payments, and how the retailer has become a project/program manager for their vendors. Managing the payments conversation between three vendors - POS, PED and the payment processor/s is a full time job for their internal payments teams. Focusing on driving change to use payments as a strategic advantage is a constant struggle with each vendor pointing a finger at the other to drive change. There is another problem which traditional POS and the PED vendors have - that is their core DNA is not around payments related solution selling, especially if the focus is in-store and enterprise payments for retail.
The semi-integrated architecture addresses this issue in a unique fashion. If implemented effectively it segments core POS and payments functionality so the dependency of one from the other disappears and thus simplifies manageability to drive innovation.
Traditionally architectures promoted tight integration between the POS and PED infrastructures to drive the payments workflow. With the POS taking the lead to drive payment auth transactions with the PED being used just as an acceptance device. This worked well for large IT environments managing spread out infrastructures. This tightly coupled architecture limited the flexibility of payments innovation with the POS infrastructure bearing down the center of gravity.
The premise of the semi-integrated architecture is to fundamentally isolate POS from payments. Thereby shifting the center of gravity of payments from the POS to the PED device, with the later taking control of the payments workflow. Semi-integrated payments vendors need to thus build strong gateway and switch capabilities but be able to bring highly advanced device management and payments engineering capabilities as well. If correctly implemented this drastically eases vendor management across the board for retailers and makes payments an isolated managed entity.
Some key benefits of the semi-integrated architecture:
- Single platform for payments - independent of Processors, POS, and PED vendors
- Isolate the larger POS and retailer enterprise and store footprint from PCI
- Single point manageability and control - P2PE, EMV ready
- Advanced device management and BYOD capabilities for retailers and consumers
- Cost reductions from high gateway and switching fees
- Single token across channels and multi-channel innovation
- BI and data analytics to drive and leading store payments operations
Key vendor attributes:
- SaaS based hosted model to take everything payments outside of the retailers infrastructure
- Strong payments engineering teams playing a consultative role with retailers
- Systems integration capabilities
- Cost arbitrage capabilities over current models
- Advanced device and transaction management capabilities and reporting
Mustafa Shehabi is the Chief Business Development Officer of Aurus, Inc.
Aurus is a technology company focused on providing payments innovation for Tier 1 and 2 multi-channel retailers. The company was founded in 2000 and is headquartered in Boston, MA with a development center in Pune, India. Aurus has one of the largest payments engineering teams, present in 20 countries across specialty retail, supermarkets, department stores and restaurant customers taking their POS out of PCI scope and drastically reducing implementation and project timelines.
AurusPay is a 5th generation, P2PE certified, semi-integrated EMV ready payments platform built for retail. AurusPay drives true multi-channel payments innovation with its advanced state management, multi payment type, multi-processor, multi device capabilities, across all retail channels and the ability to handle complex payments workflows and provide a single cross channel token.