Today, technology can zip your restaurant order to the kitchen in an instant, allow you pay your taxi fare by credit card, and let you scan your groceries as you place them in your cart. Welcome to the world of mobile point-of-sale systems. Wireless connections are in the process of altering the way we shop. And the trend continues to grow.
Point of sale (POS) is business lingo for the spot where a retail transaction takes place -- where money changes hands. Though today many people pay for things with credit or debit cards, most payments used to be made by cash or check, and merchants stored the money in a cash drawer or box. Then along came the cash register. Invented in the 1870s, it was a mechanical way to keep track of revenues and was the first POS system [source: RetailSystems.com].
Not much changed until the 1970s when the next POS innovation -- the barcode -- became available. Beginning in 1974, Universal Product Codes began to appear on items. Merchants were able to use scanners to read these codes and process sales more quickly and accurately [source: National Barcode]. In the past 20 years, retailers have added a few more gadgets to speed checkout lines, including card swipe devices for accepting credit and debit cards, as well as signature pads and personal identification number (PIN) pads.
During the 1990s, wireless computer networks -- which send radio waves through the air to transmit data -- became available, allowing POS systems to go mobile. Restaurants were among the first to adopt this new technology. They accelerated the payment process by letting staff process credit cards at customers' tables. Other businesses followed suit. Car rental companies, for example, added mobile POS to allow curb-side handling of car returns. Hotels sent servers poolside to take guests' drink orders on mobile devices.
Some retailers are now replacing centralized checkouts and letting clerks use portable computers to complete transactions. Many Apple stores, for example, which sell Apple computers and other hard- and software, have gotten rid of cash registers. Representatives answer customers' questions, check stock and finalize sales with hand-held devices [source: First Data].
Mobile POS can be especially useful in the field. For example, the Hampton Jitney bus service, which carries New Yorkers to Long Island beach communities, uses an onboard system that allows attendants to check reservations, take payments and print out receipts [source: Zebra.com]. Today, there are also systems that allow small-scale merchants like flea market vendors and bake sale operators to accept credit cards and process transactions using an ordinary mobile phone [source: Extended Retail Solutions].
Though some have concerns about the security of wireless transactions, both consumers and merchants may benefit from the availability of mobile POS. Retailers and service companies can make employees more productive and lower labor costs. A restaurant server, for example, can save considerable legwork with fewer trips to the kitchen or cash register. Also, accuracy is increased by eliminating written orders. Customers may receive speedier service and error-free, detailed receipts on the spot.
Read on to learn about the cutting edge of mobile point-of-sale systems.
Where is mobile point-of-sale headed?
Wagamama is a worldwide restaurant chain that has been an innovator in adopting mobile point-of-sale systems. When you sit down in the restaurant to enjoy Asian-inspired cuisine, a server enters your drink and food choices into a small mobile computer. The order is displayed instantly in the kitchen and at the drink bar. When it's ready, the chef pushes a button and a ticket is printed to tell the server where to deliver the food. After dinner, the server can present the customer with a bill, swipe his or her credit card, and print out a receipt from a portable printer [source: Clancy].
The next step for mobile POS systems at Wagamama is an iPhone application that allows diners to order their food before they even reach the restaurant. They can browse the menu, send their order straight to the kitchen, pay by credit card, and then either eat at the restaurant or take the food out. This feature is currently available in the United Kingdom and will soon spread to other countries [source: Clancy].
Advances in mobile POS are fueling a quest for ever greater transaction security. One way in which retailers can address this challenge is by using encrypted card readers. When they're used, the customer's information never leaves the mobile card reader except in encrypted form, minimizing the chance of it being stolen [source: Ciardiello].
Another innovation in POS systems is contactless payment. One version is a card with a built-in computer chip that does not need to be swiped. MasterCard is currently working with retailers like Home Depot and Sports Authority to install POS systems that will accept contactless cards. Some gas stations and fast food restaurants also use them [source: Mobile Banker]. The technology can speed up each transaction by 30 seconds, keeping lines shorter [source: Extended Retail Solutions].
Also on the horizon is the idea of enabling mobile phones to complete contactless transactions. Visa has kicked off a program in Malaysia that lets customers pay for purchases simply by waving their enabled phones near a terminal. The phone securely transmits the owner's credit data to the device and keeps track of transactions [source: cellular-news].
The applications of mobile POS continue to grow. For example, Stop & Shop Supermarket Co. is installing a system called ScanIt! in many of its stores. Upon entering a ScanIt!-enabled store, the shopper may present a loyalty card and pick up a portable scanning device. The scanner's display presents special offers and coupons based on a person's shopping history. It even offers coupons as the shopper nears a particular product in an aisle. A customer can scan items and immediately bag them in his or her cart. The device totals the purchases, and the shopper pays at a self-service kiosk [source: Ciardiello].
In general, mobile point-of-sales systems are increasingly decentralizing the actual point at which sales take place, minimizing wasted time and eliminating unnecessary paperwork. The goal is to make shopping as easy and as "automatic" as possible for the consumer. For more information on point-of-sale systems and other tools, follow the links on the next page.
Related HowStuffWorks Articles
- Advertising Age. "Five Mobile Trends for 2010." (accessed February 25, 2010)http://adage.com/digitalnext/article?article_id=141596
- Cellular-news. "Visa Makes NFC Mobile Point-of-Sale Payments Commercially Available." (accessed February 25, 2010)http://www.cellular-news.com/story/36940.php
- Ciardiello, Regina. "4 Retail POS Trends to Watch Out For." (accessed February 25, 2010)http://22.214.171.124/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid=5D966D0B3B444899A2CAA94013C1FB5D&tier=4&id=DD94C2A889884388A0CBAC67DB593C37
- Clancy, Meredith, Training & Marketing Manager, Wagamama USA. Personal interview. February 23, 2010.
- Extended Retail Solutions. "Trends in Payment Systems." (accessed February 25, 2010)http://www.extendedretail.com/pastissue/article.asp?art=269301&issue=188
- First Data. "The Vanishing Checkout Lane." (accessed February 25, 2010)http://www.firstdata.com/downloads/thought-leadership/fd_pos_whitepaper.pdf
- Mobile Banker. "Consumer Trends Bode Well for Mobile Payment Adoption." (accessed February 25, 2010)http://www.americanbanker.com/issues/174_198/trends_bode_well_for_mobile_pay_adoption-1002928-1.html
- RetailSystems.com. "History of Retail POS Systems." (accessed February 25, 2010)http://www.retailsystems.com/history-of-retail-pos-systems.cfm
- Zebra.com. "Customers Ride the Wave of Luxury." (accessed February 25, 2010)http://www.zebra.com/id/zebra/na/en/documentlibrary/casestudies/cs_P1008221_hamptonjitneygb.File.tmp/CS_P1008221_HamptonJitneyGB.pdf