Payments interfaces have changed materially over the years. We went from swipes, to dips, to devices that come to customers like kiosks, table side tablets, and even your own mobile phone.
Yet payments are not the exception. In 5-10 years the POS interface will look very different than it does today for both the customer and the merchant. Care to see how? The below embedded video comes from a Tokyo bakery using machine vision technology that was co-developed by a Japanese university.
And if it’s not some university it’s Amazon with their Go stores, or startups with their AI technology for dive throughs. All of these technological changes materially impact the model of POS.
One must logically ask: why aren’t POS companies coming out with these innovations? If the interface of the POS will change, isn’t that really disruptive to the core of the entire business model of POS? How could a POS company miss this evolution?
We think we have an answer.
First, POS is a very hard business. It was only recently that the industry realized they could bundle payments with POS to drive their margins materially upward (payments processing is one of the highest margin businesses in the world because the underlying product is a commoditized, legislated monopoly). This has made R&D investments in POS historically very hard to come by.
Second, only in the past ~5 years has POS become interesting for innovators. Toast, Square and others are able to attract top quality engineering and product talent. Previous POS companies were mostly built by failed merchants who wouldn’t be allowed to carry garbage at Google, let alone touch a line of code. This is why just about everything technical related to legacy POS systems are such an absolute disaster (duplicate data tables, lack of APIs, corrupted flat files, data leakage, etc, etc, etc).
Third, POS companies have had a really difficult time with focus. Many of them chase shiny objects and do it behind their walled gardens. While they’re busy dedicating resources to loyalty, analytics, or some other product category they’re going to screw up, they’re not minding the reason they exist in the first place – their f*cking POS! How do you think NCR arrived in a position where they don’t have a cloud replacement for their POS product lines despite cloud POS having launched a decade earlier?
The POS interface will change sooner than people realize. If you don’t mind your core business model then everything else will be irrelevant. But maybe you want to experience that NCR Outcome where you lose 10%, 15%, or 20% of your customers every year while you sit behind your walled gardens and wonder why.
People do crazy things. Try not to be one that we write about.
