Commonwealth Bank has announced a suite of new services aimed at the point of sale (POS) market and has clearly displayed how far ahead it is of the other Big Four banks in the race to control the lucrative POS market, which is now being disrupted by global players and new technology.
The CBA’s new suite of point of sale services includes the CommBank Pi software platform, a tablet POS device intriguingly called Albert, an iPhone and iPad plug in service named Leo and Appbank which is an iTunes style store for business software.
Appbank already has some applications developed by the CBA including the Split the Bill feature which divides a restaurant or café bill among a group – perfect for those blessed with stingy in-laws who count out five cent pieces to exactly cover their 32.65 per cent of the meal.
The Pi software platform is the centrepiece of the new services and an important part of the bank’s strategy to control payments made across Australian shop counters. To help the service’s market take up, Pi’s features are open to all businesses and software developers wanting to create a payment related app.
Existing POS software developers are suspicious of these moves, “beware the wolf in the shiny costume” one vendor told Technology Spectator. Although that supplier did go on to say “we will do what we need to do to ensure that we work with this platform like we do already with many others.”
CBA’s introduction of these services follows PayPal’s introduction of the PayPal Here service, a plug in device similar to the CommBank Leo that turns an iPhone or iPad into a point of sale terminal.
One of the world leaders in this sector has been start-up US company Square who have built a billion dollar business on turning New York taxi drivers’ iPhones into payment gateways. Square recently announced they are about to start moving into overseas markets.
Google and Facebook have also entered the POS and online payments markets although their services haven’t been successful to date. In the meantime telcos are looking at ways of clipping the payment ticket through their perceived ‘ownership’ of the mobile handset customer.
As Near Field Communications (NFC) chips become commonplace on smartphones, there will be plenty of opportunities for in-store payments to be channelled through mobile phone bills or the various app stores.
The giant in the app world – and no slouch in ‘owning’ its customers – is Apple who last week quietly rolled out their own EasyPay system where customers can pay for goods in store using iTunes to their Australian shops.
Given Apple’s tight control on customers and their dominance of the mobile marketplace even stores operating on tight margins may find themselves reluctantly paying an ‘Apple tax’ on their sales should the company decide to roll out EasyPay to the general market.
With Apple, Paypal, Google, the credit card companies, mobile telcos and a cast of hungry and innovative start-ups entering the merchant services market, what was a safe money earner for the Big Four banks is now coming under great competitive pressure.
The global battle for the shop counter is coming to Australia and coupled with the Kaching! online payments service announced earlier this year the CBA is the best placed of the Big Four Australian banks to compete with the global giants and keen start-ups who are disrupting the once cosy marketplace.
Ignoring the threat posed by the global players and new technologies in the lucrative point of sale and merchant services markets might be a decision the shareholders of the NAB, ANZ and Westpac will come to regret.
Paul Wallbank is a business technology writer, broadcaster and blogger and author of eBusiness: Seven Steps to Online Success. Read more of Paul's thoughts here.