VeriFone to Unveil Tablet Credit-Card Reader This Year to Take On Square
VeriFone Systems Inc. (PAY) will introduce a tablet-computer accessory this year that makes it easier for retailers to accept credit and debit cards, Chief Executive Officer Douglas Bergeron said.
The product will encase tablets including Apple Inc. (AAPL)’s iPad and Samsung Electronics Co.’s Galaxy Tab, offering businesses an alternative to a payment device from startup Square Inc. and traditional cash-register terminals, he said. Several retailers are testing the device, to be released after the end of August, he said. No price has been set.
“We are trying to make payments an easier and richer experience,” Bergeron said in an interview. The device communicates wirelessly with retailers’ financial systems, he said.
VeriFone is chasing a stake in a potential $100 million U.S. market for accessories, software and services that read cards on tablets, Bergeron said. The product could help VeriFone boost sales at large retail stores and set it apart from Square, which targets mom-and-pop shops with card readers for smartphones and tablets.
Square got fresh ammunition yesterday in its bid to fend off rivals. The startup said it raised $100 million in funding from investors led by venture capital firm Kleiner Perkins Caufield & Byers.
Retailers are increasingly moving away from traditional, stationary cash registers to mobile checkouts. More than 50 percent of large specialty stores plan to deploy tablets in the next 12 months, according to a January survey by market researcher IHL Group in Franklin, Tennessee. Sales associates can use the devices to look up information on products, place orders and accept payments.
“The salesperson who spends half an hour with you explaining the product should close the deal right there,” Bergeron said. “You can increase sales.”
Many consumers research their purchases in a brick-and- mortar store only to purchase the items later online, he said.
Card-accepting tablets will probably increase an average store’s outlay for payment products from companies like VeriFone and Ingenico by about 20 percent within three years, said Greg Buzek, founder of IHL Group.
“It’s an opportunity for the VeriFones of the world to sell more devices,” Buzek said.
Square’s business model isn’t threatened by competing entries in the market for tablet payments, said Keith Rabois, chief operating officer of Square. The company remains focused on selling its products to the 29 million small businesses that currently don’t accept credit cards, he said.
“We have our own vision for improving buying and selling,” Rabois said. “We don’t pay much attention to what others are doing.”