What is mobile acquiring

[President]

Table of contents

1. Who is it for
2. Benefits
3. Disadvantages
4. Technology and features
5. How to choose
6. HOW TO CHOOSE AN MPOS TERMINAL

Mobile acquiring is one of the types of accepting payments from bank cards through special portable terminals (mPOS) that connect and work with mobile devices such as tablets or smartphones.

mPOS is an abbreviation for English. "Mobile Point Of Sale".

The mPOS terminal can be connected in different ways:

• via the 3.5 mm mini-jack audio cable connector,
• via wireless Bluetooth channel,
• through the power connector (depends on the model of portable digital equipment, most often MicroUSB),
• and in other ways.

Readers (card readers) can be:

• magnetic (withdrawn from circulation as unsafe; international payment systems transfer all banks to issue cards only with microchips),
• for chip cards,
• combined.

With this approach, you can literally carry your business with you in your pocket. The equipment is very compact and easy to use.
Mobile acquiring is primarily of interest to micro-companies and small organizations that occupy a narrow niche in the service sector or in the sale of goods. Somwe lows have entered into force, which oblige merchants and service enterprises to accept bank cards for payment. Refusal promises the issuance of fines from some money.

Who is it for

• Small restaurants, street cafes.
• Taxi services and private drivers.
• Courier and delivery services.
• Brokers and insurance agents.
• Beauty salons and private masters providing certain types of services on the road (manicure, makeup, haircut, massage, etc.).
• Private tutors, trainers, masters.
• Recently opened online stores or offline points of sale with a small assortment of goods and rare demand.

Benefits of mobile acquiring

1. Mobility. In certain areas of business, it is required to accept payments on the spot, for example, a home delivery service (courier service), a taxi, private services provided at home (haircut, manicure massage, taking tests, etc.). For a long time, non-cash payments were not available. mPOS terminals have radically changed the situation.
2. You can accept payments anywhere you have access to the Internet. The equipment is completely autonomous (has built-in batteries or is powered by a smartphone-tablet battery).
3. The cost of mobile terminals is often noticeably lower than the prices for stationary models (POS terminals). Some service providers provide equipment free of charge.
4. Payment aggregators offering connection of mobile acquiring also provide access to a free reporting system with advanced functions (analytics, integration with other business systems).
5. When using the services of the services, you can withdraw funds to any current account. Most large banks that connect merchant acquiring, on the contrary, prefer to work only with their current accounts, which can significantly increase the costs of settlement and cash services (CSC).

Disadvantages

1. Currently, most inexpensive terminals do not print paper receipts; purchase confirmation is sent to the cardholder's e-mail or in text form via SMS. First of all, this limitation is dictated by the small dimensions of the devices. In the second, the high cost of registration and maintenance of fiscal apparatus. Some banks and services have already introduced mPOS terminals with the function of printing checks (mobile cash register machines, smart terminals, etc.), but such devices are rare and expensive for the market segment they are intended for. However, it is they who provide everything you need for a full and safe sale (transaction). With a turnover of more than some money you can get an mPOS terminal with a receipt printer for free.
2. The payment will not be accepted if there is no Internet access.
3. Payments for access to the network are added to the costs.
4. Service tariffs are higher in comparison with classic merchant acquiring. This is due to the fact that in addition to acquiring banks, issuers and the payment system, one more party is involved in payments through mobile acquiring - the service provider.
5. High risks when making payments. Not so much for customers, since payment terminals are constantly being improved, outdated and unreliable technologies are being replaced by more secure ones, etc .; how much for sellers and merchant banks. So, for example, the payment can be canceled by the bank later due to non-compliance with the system requirements (the client can put an illegible signature, etc.).
6. The payment time is longer compared to merchant acquiring. Many actions are required: connect a card reader, launch the application, select the appropriate item in the menu, enter customer data (phone number or email address), receive a signature, etc.
7. There are restrictions on accepting payments from individual cards. So, the payment may not be debited from a bank card issued in another country, the system does not work with all types of cards, etc.

Technology and features
The payment scheme is as follows:

1. The client expresses a desire to make a payment using a bank card.
2. If the payment service works with this type of cards, the merchant employee connects the terminal to a mobile device (most often a smartphone, maybe a tablet) and launches the application.
3. For security reasons, access to the application can be blocked with a separate PIN code. The menu item "Payment" (or an analogue) is selected.
4. The amount is entered manually and, if necessary, a note to the payment (purpose) is filled in.
5. The card is read (depending on its type - magnetic stripe or chip).
6. The application may request a reconciliation of the last digits with the card number.
7. The transaction for debiting funds from the client's account is started.
8. If the funds were successfully debited, the application displays a window where the client must sign (with a finger on the touch screen).
9. To send payment data, the client provides his phone number or e-mail address.
10. The operation is reflected in the history through the personal account of the service or from the menu of the mobile application (some services allow you to track the place of the payment).

The mobile acquiring service may impose certain restrictions on accepting payments. These can be limits on the frequency of transactions (once every few minutes), limits on the amount of one-time transactions or per day (month, etc.). The frequency of withdrawal to the current account is determined in the terms of the agreement.This can be regular deductions upon reaching a certain threshold, daily transfers after a certain time of the day, etc.

Cards issued with an additional security system, such as 3-D Secure, may require separate confirmation when paying by sending special codes to the linked phone (one more payment step is added).

How to choose mobile acquiring for an individual entrepreneur or LLC
Acquiring with a mobile terminal is perfect for novice entrepreneurs who have not yet developed a buying audience and imply rare sales with a large allocation of time to one client.
This method of accepting payment is suitable for private specialists (on-site services), taxi services and courier services.

Mobile acquiring is not suitable for all companies that assume a medium or high load on cash registers, frequent sales, where the time of one purchase is very important for business. In this case, you should pay attention to the classic merchant acquiring with POS terminals.
If a business owner is firmly convinced that mPOS devices are indispensable, when choosing a service provider, you should pay attention to the aspects described below.

Evaluation of banks or services offering mPOS acquiring services must be performed according to many parameters (if there are difficulties in comparison, you can collect all the data in a pivot table for clarity). The main evaluation criteria include:

1. The cost of equipment (do not exclude the purchase of smartphones or tablets from the list, since the payment system will not work without them, you should definitely clarify the compatibility of the offered terminals with your gadgets).
2. The final commission charged by the service (together with the bank). It is imperative to calculate the profitability of typical transactions, for example, a fixed minimum payment of the system can greatly reduce the profit from each check, especially if the average check amount is very small. Do not forget about the possible commissions for withdrawal to the specified current account.
3. What current accounts does the service (bank) work with? How much and how will it be possible to save on cash settlement services without harming the business.
4. What restrictions does the service have - the number of transactions per unit of time, daily / monthly limit on amounts, etc. How this will affect the business model.
5. Types of cards that the terminals work with. Each refusal to accept non-cash payments can promise not only a decrease in customer loyalty, but also serious fines.
6. Simplicity, speed and reliability of the payment. It is best to check all services that are suitable under other conditions in test mode, read customer reviews, etc.
7. Simplicity and speed of registration in the service (bank) when connecting to the service.
8. Supported mobile operating system platforms, as well as responsiveness and adequacy of technical support.
9. How wide is the geography of the service (bank) presence. Some, for example, can work only in a small number of large cities.
10. Are there any additional functions, such as advanced access control to the personal account of the service (for companies with a large number of staff), loyalty programs, advanced analytics on transactions, integration with working business systems, etc.

Some services offer off-the-shelf industry solutions that fully cover emerging merchant needs (merchant needs). They should be considered first of all, since they are already adapted to the realities of doing business in these areas.

HOW TO CHOOSE AN MPOS TERMINAL
An mPOS terminal is a portable device designed to implement the technical possibility of accepting bank cards for payment, connected to smartphones or tablets as an additional module (via a wired or wireless interface).

Benefits
The main advantages of mobile acquiring terminals are their miniature dimensions and the ability to operate autonomously without a full-fledged cash register module. Thus, having a smartphone (or tablet) and an mPOS terminal with you, you can accept payments anywhere with Internet access.

Low cost and mobility contributes to the widespread use of mobile payment terminals in small and micro businesses. As an example:

• delivery services of goods,
• Taxi,
• field managers,
• provision of individual services at home (analyzes, haircuts, manicure, etc.).

Another feature is that mobile terminals for cards, in fact, implement their functionality only via the Internet (the technology is comparable to Internet acquiring, with the only exception that card data is entered not manually into special forms on the site, but through physical reading ), which opens up new opportunities for accepting payments. Here, the acquirer does not have to be a bank, it can be a payment aggregator or a third-party service with very favorable terms of cooperation, loyalty programs, etc. etc.
Many banks or payment services provide mobile terminals for free or for rent, although most often you will need to buy an mPOS terminal to use for business purposes.

Disadvantages
Unfortunately, there are no perfect solutions. mPOS also has its drawbacks.

1. Long processing time for one transaction. Of course, technical implementations do not stand still and time changes with each new mPOS model downward, but in general, classic POS terminals always win.
2. Lack of a fiscal printer. Some models have already begun to be equipped with a built-in receipt printer, but in most cases the situation remains the same (receipts are sent via SMS or e-mail without paper media). The problem is solved by purchasing a separate portable fiscal printer, but in this case the cost of a complete set for accepting cards for payment at the exit increases significantly, in some cases it is easier to buy an autonomous POS terminal with a GSM module right away.
3. You will not be able to accept payment in an area without mobile Internet coverage. And communication costs are automatically added to the costs.
4. Often, the tariffs for the provision of mobile acquiring services are slightly higher in comparison with merchant acquiring.
5. The technology for accepting payments is not as reliable as in merchant acquiring, for example, the client may put an illegible signature (sometimes used as a way to authenticate the holder), which will lead to the cancellation of the payment.

Whatever the disadvantages, the use of mobile payment terminals in certain types of business is still justified, since there is simply no alternative.

Main manufacturers

• ACS (Advanced Card Systems)
• IDTECH
• Datecs
• SumUp
• Bitel
• Elo
• IBA

MPOS components
At the moment, international payment systems are trying to regulate in detail the work of mobile payment solutions, for this, special standards have been adopted and introduced for several years, manufacturing enterprises and finished products have been certified, etc.

The most up-to-date information on current standards is given in the context of individual system components below.

Component	PCI standard
Smartphone, tablet (mobile device)	No requirement
Read without keyboards (PIN-pads)	PCI PTS SRED
Read with PIN-pads	PCI PTS for EPP
Software (software) for installation on a mobile device	PCI Mobile Payment Acceptance Security Guidelines for Developers 1.1 or PA-DSS Both options are for guidance only.
Reader software	PA-DSS
Payment gateway	PCI DSS
Acquiring system interacting with the international payment system (MPS)	PCI DSS

There is a more comprehensive approach - the PCI P2PE standard, if the payment solution is certified in accordance with it, this means that all components included in the system (from the reader to the acquiring system) comply with the requirements of the above standards, and the data of user cards at any stage does not are transmitted in clear text (only encrypted).
Devices for the implementation of mobile payment solutions on the market are no longer new, but unfortunately, not all of them meet the above requirements. Which introduces certain risks for both payers and acquiring banks, as well as for business owners.

Technical capabilities
Due to the fact that, on the one hand, the reader must work with all types of cards, and on the other hand, it must be connected to the maximum possible number of mobile devices (to tablets and smartphones, and the number of technical implementations of both groups of devices varies greatly), manufacturers are betting on the following options connections:

Wired:

• Audio jack (3.5 mm mini-jack);
• MicroUSB (USB Type C and other USB connection options);
• Apple connectors (modern Lightning or older)
• RS-232 (this is more of an engineering port).

Wireless:

• Bluetooth (various standards);
• Wi-Fi;
• GPRS (3G and other types of wireless data transfer protocols over providers' networks).

In the latter case, a smartphone or tablet is actually not needed to receive payments. Since all the required functions are already built into the terminal. The mobile device can be connected rather to expand the capabilities of the terminal itself.
By technology of reading cards, readers can be:

• With support for smart cards (ISO7816 standard);
• Contactless (ISO14443 standard, RFID-tagged cards are supported, as well as new mobile payment technologies such as AndroidPay, ApplePay and SamsungPay);
• For reading the magnetic stripe (HiCo / LoCo).

How to choose an mPOS terminal
As in the case of classic merchant acquiring, you cannot just take and buy the most interesting version of the mPOS terminal on the market.
Due to the fact that the device will be included in a unified information system, fixed technical requirements are imposed on it (and this is not only compliance with security standards, but also requirements for the method of connection, reading technology, etc.).
The payment is realized not only by the mPOS terminal, the work takes place with the participation of special software installed on a smartphone (tablet). In addition, the exchange of data does not take place directly with the acquirer's servers, but through intermediaries (for example, through the aggregator's payment gateway), which again imposes a number of restrictions and requirements on connected terminals.
Conclusion - the choice of an mPOS terminal is directly related to the choice of a company offering payment services with the participation of mobile payment terminals. A clear plus is that such companies do not have to be acquiring banks (as is the case with classic POS solutions), they can be payment aggregators or intermediary companies. This means that the choice is large enough to find the most optimal option.

If we talk about the technical side of the issue (what capabilities the terminal should have for your business model), then you should pay attention to the following details.

MPOS device connection type	Benefits	disadvantages
Audio jack	This type of connector is available in almost all smartphones and tablets (although on some models it may be absent due to the rejection in favor of wireless sound transmission technologies) The devices are very cheap to manufacture No separate charging of the built-in battery is required, since the reader is powered from the audio jack	Poor reader security (data is transmitted via analog signals) Requires a mandatory wired connection to the smartphone, which actually increases the load on the connector and can prematurely disable it
Other wired interfaces (MicroUSB, Lightning, etc.)	Same benefits as audio jacks Data exchange security is higher (transmitted in digital format)	A mandatory wired connection to the mobile device is required (increased port wear, risk of bending, damage, etc.) Reader connector type may not be suitable for all smartphones or tablets (you will have to purchase mPOS separately for Apple devices, separately for most Android devices, etc.)
Bluetooth / Wi-Fi	No load on the hardware connectors of mobile devices The reader and smartphone (tablet) can be separated at different points Data exchange takes place in digital format (high security) Connects to mobile devices regardless of their hardware connectors Most often they are equipped with a PIN-code input panel, which increases the security of payments and the degree of customer confidence	Requires periodic recharging of the built-in battery High price
GPRS / 3G, etc.	They can work as full-fledged POS terminals (no mandatory connection to smartphones or tablets is required), which speeds up the process of accepting payments Equipped with a PIN input panel High security of payment transactions Often they combine several additional interfaces (Wi-Fi and / or Bluetooth), that is, they are in many ways similar to wireless readers	High terminal cost Battery needs recharging

In all other respects, the choice of mPOS solutions largely depends on the required capabilities of the service itself (accepting various types of cards, working with different international or national payment systems, compliance with security standards, speed of payments, user-friendliness of the interface, etc.) and, of course, commissions for operations, cash settlement expenses (if the service is provided with the participation of banks specified in the agreement with the aggregator, or selected by you).