KEY POINTS

  • In an increasingly digitized world, brick-and-mortar retailers are facing immense pressure to understand and accommodate their customers’ changing needs. In reaction to these shifts, major retailers are replacing their traditional point-of-sale (POS) terminals with full-feature, "smart" devices that help them to more effectively engage customers and build loyalty.
  • But small- and medium-sized businesses (SMBs) don't typically have the funds or resources to develop enhanced capabilities at the POS. That's where app marketplaces come in: POS app marketplaces are cost-effective platforms, typically deployed by POS firms, where developers can host third-party business apps that offer both back-office services and customer-retention tools.
  • POS app marketplaces have become more prevalent recently thanks to a number of trends in the payments industry. These include the EMV liability shift, which went into effect more than two years ago, and the rising costs and lack of flexibility of traditional POS terminals, which have incentivized SMBs to turn to cloud-based POS solutions to meet their needs.
  • As a result of these trends, legacy POS players, and challengers alike, have been forced to shift their focus to service-based solutions. Companies like Ingenico and Verifone, which are known for their flexible mobile and integrated devices, are building out robust service channels to meet merchants' evolving demands. 
  • Players in the space are betting that app marketplaces will help them grow their bottom lines, but they'll need to adjust their strategies to better accommodate the unique needs of SMBs. Merchants still want a seamless user experience, more ways to gain repeat customers, and personalized app recommendations. Providers will therefore need to continue adjusting and improving their marketplaces moving forward.

Introduction 

In an increasingly digitized world, brick-and-mortar retailers are facing immense pressure to understand and accommodate their customers’ changing needs, including at the point of sale (POS). More than two years after the EMV liability shift in October 2015, most large merchants globally have upgraded their payment systems. And beyond upgrading to meet new standards, many major retailers are adopting full-feature, “smart” devices — and supplementing them with valuable tools and services — to help them better engage customers and build loyalty.

But POS solutions aren’t “one size fits all.” Larger merchants may have the resources and funds to adopt robust solutions or develop them in-house, but small- and medium-sized businesses (SMBs) don't usually have these capabilities. That's where app marketplaces come in: POS app marketplaces are platforms, typically deployed by POS providers, where developers can host [...]