“The big change for terminals is that they will need software that requires more than just the ability to pay,” Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, tells ISO&Agent.

Ablowitz expects terminals to feature software that will improve such areas as discounts, coupons and loyalty-point systems. “All of those things are going to be part of the consumer experience, and that is what is going to be the sizzle in any NFC rollout,” he adds.

In the end, Ablowitz believes NFC will change the way the terminal manufacturers approach their business models.

“The hardware manufacturers have over the years looked to prove that they can build a recurring revenue business,” Ablowitz says. “They are used to selling a device, and if the device doesn’t break, they’re done” with the merchant interaction, he says

That changes with NFC because many of terminal makers already are moving toward a different business model by trying to incorporate software applications into the terminals that leverage NFC-enabled phones.

Such add-ons historically have been the responsibility of independent sales organizations and merchant acquirers, and the uncertainty is whether the terminal makers can pull that off themselves, Ablowitz says.

Payments Source, May 2, 2011
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