POS Terminal? What’s That?

Cloud connectivity, apps, and features beyond payments are shaping the next evolution of the point-of-sale terminal.

With all the discussion surrounding merchant adoption of point-of-sale systems and integrated payments, one might think the days of the conventional POS terminal are numbered. Their days as an isolated piece of equipment with a sole function as the entry point for payment transactions may be dwindling. But, that does not mean the venerable POS terminal is about to become an historical artifact, as long as it’s not in isolation.

“Any system today, whether it’s a point-of-sale or hardware device, that is not cloud-based is dying,” proclaims Jared Drieling, senior director of business intelligence at The Strawhecker Group, an Omaha, Neb.-based payments advisory firm.

Today, a conventional POS terminal may still sit on the countertop, but with increasing likelihood it’s connected to POS software. It still captures payment data, but now it may act as the citadel, protecting the integrity of the data and sharing only the minimum information necessary with the software. The POS terminal may have a PIN pad or signature-capture capability. It may enable consumers to enter loyalty-program information or redeem offers.

In instances where there is no conventional POS terminal, a merchant likely has a tablet-based POS system in place. Since 2010, when Apple Inc. debuted its iPad and POS software developers flocked to the form factor, tablet-based POS systems have steadily gained favor among merchants.

‘Very Limited’ Growth

At first, the tablet form factor, like the smart phone before it, was innovative and attracted businesses. Then, as cloud connectivity improved, the opportunity developed to bundle other services, such as employee scheduling, inventory management, pricing, and detailed sales reports, making cloud-based POS systems the preference for many businesses, especially small businesses that now could afford them and had a need for them.

That has had a dramatic effect on the market.

Even traditional POS systems, which typically had updates performed when the maker sent a technician to install new software or hardware, are losing ground against cloud-based systems, Drieling says. Some merchants avoided these updates because they might cost thousands of dollars.

“In legacy systems [POS system makers] developed the code and would try to customize it for you,” Drieling says. “Cloud-based POS systems can be integrated with new or existing systems. It allows the developer to integrate other software into that system without having to create software to bridge the two together.”

Such developments mean that the outlook for conventional POS terminals is quickly changing. “Conventional countertop devices are going to be around for a very long time, but the growth of that category is very, very limited,” says Thad Peterson, senior analyst at Boston-based Aite Group LLC.

‘Reactionary Mode’

For sure, Square is one of many to launch so-called smart terminals, which use apps and enable easy integration to POS software. Square chief executive Jack Dorsey even heralded the new Square Terminal during a November earnings call as the replacement for “dinosaur” POS devices. The same month, payments provider North American Bancard Holdings LLC launched its own smart terminal, joining competitor Poynt Co., which debuted its device in 2014.

The common denominator in all these devices is the connectivity. That is a boon to small businesses, which had to forgo POS systems of the past because of the costs. “The most critical point to why these cloud-based systems are growing, primarily in the small and mid-size space, is they allow a lot of integration,” Drieling says.

This ability to integrate payments with software that can run other business functions is much sought-after in retail. In August, for example, payments provider Global Payments Inc. paid $700 million for AdvancedMD, developer of medical-office management software.

This all points to a very cloudy future. For the likes of Verifone Systems Inc., Ingenico Group, and Equinox Payments, which sprang from the former Hypercom Corp.’s U.S. unit, their roles as providers of traditional POS terminals will change, Peterson says.

“The challenge with the Ingenicos and Verifones of the world is they are in reactionary mode,” he says. “But they’re easily disrupted by players coming in with more flexible and lower-cost offerings.”

Going Up Market

It’s not for lack of effort on their part. San Jose, Calif.-based Verifone, which went private this fall, has been emphasizing services revenue for years and launched its Carbon line of smart terminals to better compete.

Paris-based Ingenico, too, has grown its services revenue and made changes. In April, it launched the Moby/C150 ECR that features an Android-based tablet with a 15.6-inch display.

As it adapts to changes among merchants and consumers, Ingenico finds itself examining the point of interaction between consumers and merchants. While Mark Bunney, Ingenico North America director of go-to-market strategy, says there will still be customers for standalone POS terminals, the market is changing.

“Lots of the tablet or mobile POS providers are definitely changing some of the dynamics in the market­place,” says Bunney. “We have to change not only from a hardware perspective, but [in] how it’s going to impact our software and services.”

Bunney points to Apple’s own retail stores and Amazon.com Inc.’s Amazon Go locations as examples of this change. There is no POS station in an Apple store. It’s all mobile, Bunney says. And in Amazon Go stores, the consumer’s own smart phone with the Amazon app is the payment mechanism.

Of the three primary categories of POS-terminal technology—the standalone device, the integrated POS, and mobile POS—demand for standalone devices is declining, Bunney says.

“That’s part of the market migrating to an integrated solution or going to a more tablet solution,” he says. “The other thing we’re seeing in the integrated market is merchants as well as the consumer want to have additional interaction beyond just the payment with the merchant.”

That mirrors what Peterson sees in the market. “The customer experience used to be managed by the merchant,” Peterson says. “Now, the consumer controls their own experience.”

That control has been enabled by the versatile tablet. “Now, the POS could look like a tablet,” Bunney says. It depends on the type of interaction consumers want, he says. “People want sleeker-looking solutions,” he says. “They don’t always necessarily want to have a separate payment device from the tablet.”

That’s not to say that a tablet, or cloud-based POS system, is for every type of merchant. Bunney doesn’t think large merchants would be as satisfied with a tablet-centered POS as they would be with something designed for their complex needs.

Still, some cloud-based POS system providers have made moves to go up market. Square Terminal, with its integration capability, is one example, and First Data Corp. is promoting its Clover POS system for fine dining.

Postponing Extinction

How the POS experience will adapt is uncertain, with its dependence on how consumers shop and the technology they use and how merchants react to these changes.

However it evolves, there will be integration of the payment-acceptance device into the overall checkout experience.

“The standalone device where it’s not talking to the POS is in decline,” Bunney says. Yet he doubts it will disappear completely, despite Square’s claim the older tech is a “dinosaur.” “In some areas, it may not be growing at as fast a rate,” he says. “There is still that interest level.”

The hardware side may not change too much in the near future, Bunney says, with the exception of some devices, like tablets, gaining contactless-payment acceptance. Most POS terminals shipped since at least 2015 by the likes of Verifone, Ingenico, and Equinox have contactless tech built in, if not yet activated.

Better contactless identification marks may be part of future devices, Bunney suggests. “How do you make it easier for the consumer to interact from a hardware perspective?” he asks.

POS software, in all forms, will evolve much faster, he says. Not only will industry standards from EMVCo, which sets the specifications for EMV chip-card acceptance, influence this, so will PCI Security Standards Council standards on PIN-on-mobile, which enables commercially available devices to securely accept PINs.

PIN-on-mobile is one of the trends Peterson sees influencing the evolution of the POS experience. It’s devolving the POS into smart devices that are not POS devices, he says. More use of mobile devices, especially for in-aisle checkout, and increasing awareness and availability of alternative payment methods are two other trends.

The Ultimate Payment

The so-called traditional POS makers will have to evolve, says Drieling. “They need to come out with some competitive products,” he says. “They know the POS industry very well. They probably have the capability to bring out some competitive cloud-based POS products. I don’t see them doing very much in the independent software vendor space.”

The future POS may not even resemble a POS device or tablet.

Even Amazon’s Alexa voice assistant almost qualifies as a POS device, Drieling says. Echo and other in-home devices enable consumers to use their voice to authorize orders. “The next step is unified commerce,” he says, allowing a consumer to start a transaction in one channel and go through others until making the ultimate payment.

 

Source: http://www.digitaltransactions.net/magazine_articles/pos-terminal-whats-that/

Pay-at-the-Table Comes to a Restaurant Group With Ingenico Devices

A restaurant franchiser is deploying Ingenico Group point-of-sale terminals as part of a migration to pay-at-the-table payment acceptance at its TGI Friday’s and Zinburger Wine and Burger Bar locations, Ingenico announced Wednesday.

The deal ultimately will see pay-at-the-table service, where the server brings the POS terminal to diners at their tables, at approximately 80 locations owned by Livingston, N.J.-based Briad Group. Each location will use approximately 10 Ingenico iWL252 devices, which accept magstripe, EMV contact and contactless and mobile payments, Mark Bunney, Ingenico North America director of go-to-market strategy, tells Digital Transactions News. The devices contain printers and a secure PIN pad for debit transactions.

Posera Ltd, a London, Ontario-based payments-software developer, provides its SecureTablePay middleware to connect the Ingenico devices to the POS systems in the restaurants. Installation begins this year and continues into 2019, Bunney says. Briad tested the pay-at-the-table service a year ago at a TGI Friday’s location.

Momentum for the pay-at-the table trend appears to be picking up in the U.S. market. In the Briad Group installation, benefits reportedly include convenience for the diner, better security, and potentially increased table turns for the restaurants. The semi-integrated nature of the system also may reduce Briad Group’s PCI-compliance scope because it segregates sensitive payment data from other software.

The pay-at-the-table routine shortens the typical payment operation from 12 to seven steps. It eliminates the need for the diner to wait for the server to return to pick up the card because the diner uses the POS terminal left at the table to make the payment. The server doesn’t have to walk back to a centralized POS system to input the payment, then return to the table with the receipt. This puts the consumer in control of the payment, Bunney says.

Pay-at-the-table also means the credit or debit card doesn’t leave the cardholder’s hand. That may be important to many consumers because data compromises continue to plague the hospitality industry. Ninety-three percent of the data compromised at hospitality POS systems involved payment data, Verizon said earlier this year.

The other potential benefit is the ability to improve table turnaround times. Bunney says tests by Posera found that, on average, table turns increased by 15%, or nine minutes per table.

Briad also said its chargebacks decreased in its test of pay-at-the-table technology. “Lowering our costs was good enough for us to decide to deploy the SecureTablePay and Ingenico Group solution; the positive feedback we got from customers was icing on the cake,” Tom Cornell, Briad director of information systems, said in a press release. “Our servers like using it too, as it allows them to spend more time at their customers’ tables and less time going back and forth to their terminals.”

Pay-at-the-table technology is not new, having been used internationally for decades. Ingenico itself has shipped more than 10 million pay-at-the-table devices, Bunney says. What makes now an opportune time for U.S. restaurant operators to adopt the technology is a combination of EMV, the surge in digital transactions, both in-store and online, and consumer affinity for mobile devices, he says.

Source: digitaltransactions.net

Affirm is partnering with Expedia and Eventbrite so you can pay for experiences over time

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Affirm has made it no secret that its success will hinge on its ability to offer customers a wide range of retail partners where they can frequently use Affirm to pay.

While the lending startup originally launched with niche partners like Casper mattresses and Boosted Boards, they have expanded partnerships to over 700 retail merchants with the hopes of tempting a more diverse range of shoppers to try the service.

But today at Shoptalk Affirm announced they are partnering with Expedia and Eventbrite to offer 3-, 6-, or 12-month payment plans to customers buying intangible “experiences” like a vacation or concert ticket.

On the surface, the benefits for both sides are clear. Affirm gets a large, pre-existing customer base with whom it can offer financing, and Expedia and Eventbrite get to offer their customers a new payment option, which Affirm says typically leads to increased sales performance by retailers.

But are one-time experiences really something consumers should finance? The answer is probably that it depends on when the actual experience is in relation to when you made the purchase.

For instance, it would be nice to pay over six months before you fly to that exotic country you’ve always been dying to visit. But on the other hand, who wants to be stuck paying for six months after you’ve experienced the trip?

Financing experiences also raises the question of whether or not shoppers will still repay Affirm after they already went on a vacation. With a tangible good, you continue to gain utility every day for months or even years after you’ve repaid the company. But with a vacation, shoppers may be more likely to leave Affirm on the hook for the balance of the trip when they are still paying a year after the experience they now barely remember.

The company’s response to this is that they will be treating travel and ticketing the same way as material goods, and still will use “thousands of data points” to assess a consumer’s ability to repay. And, if repayment trends do change, they will “adjust their models accordingly to ensure they approve consumers in ways that maximize repayment rates”.

As we’ve discussed before, high-interest rate financing plans like the ones offered by Affirm can be a sticky situation.  On one hand, there is a risk of customers using the service irresponsibly to finance nonessential items that they can’t afford. But, if used responsibly,  Affirm can empower consumers to stretch their dollar – so they don’t have to settle for goods or experiences that they don’t really want, but are the only thing they can immediately afford.

TechCrunch

 


Visa Tweaks Chip Card Processing Protocol; Says EMV Debit Cards Now Surpass Their Credit Brethren

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Many consumers and merchants adjusting to using newly-issued EMV credit and debit cards may undergo a perception versus reality check as Visa Inc. prepares to debut its Quick Chip for EMV program. Visa also provided updated chip card issuing and acceptance data.

Announced Tuesday, the program enables consumers to remove their EMV cards typically within two seconds of inserting them into compatible point-of-sale terminals. The program addresses a perception issue that chip transactions take more time than those made with a magnetic-stripe payment card, Stephanie Ericksen, Visa vice president of global risk products, tells Digital Transactions News.

“With more and more cardholders and merchants using chip cards as part of their lives we have heard concerns about chip transactions,” Ericksen says. The move will enable consumers to put away their cards quicker while the merchant rings up purchases.

Unlike mag-stripe transactions, the chip card must be inserted and left in the POS terminal until authorization. That is a measure to ensure the card is not counterfeit. The Quick Chip program does not alter the speed or components of an EMV transaction, Ericksen says. What it does is to enable the consumer to remove the card from the reader prior to the authorization response.

“From a card perspective no changes are required,” she says. “It works on all our cards today.”

What does need to change is the instruction sent to the POS terminal. “There’s a small change to the terminal to allow for the prompt to remove the card in advance of the authorization response,” she says.

No additional testing or certification is necessary because this protocol is part of the EMV standard already, Ericksen says. The middleware provider, terminal maker, or potentially the acquirer or processor has to make the prompt alteration.

The process is somewhat similar to when a power outage strikes a merchant location that has EMV terminals, she says. In that case, the transaction proceeds, but the authorization response is deferred until the terminal connects again. “It’s already an existing function being used today in some environments,” Ericksen says, pointing to in-flight EMV transactions that are processed once the plane lands.

Already, some payments-industry companies are working with Visa on reduced insertion times, including processor Total System Services Inc. (TSYS), POS terminal makers Equinox Payments and Ingenico Group, and payments software and certification firm B2. No merchants are enrolled yet, but Ericksen says Visa is working with some to do just that.

Meanwhile, Visa’s update on EMV data shows that for the first time there are more EMV debit cards in issue in the U.S. than EMV credit cards. As of March 31, there are 133.9 million Visa debit EMV cards and 131 million Visa credit EMV cards. The total of 264.9 million is 86.6% higher than the 142 million cards in October 2015, making the United States the largest chip-card market. At the end of December, Visa said there were 212 million Visa chip cards, but it did not split the total by credit or debit.

Issuers delayed their EMV debit card plans while technicalities over a software tweak to enable multiple debit network transaction-routing options were worked out. The tweak was necessary to comply with the Durbin Amendment to the 2010 Dodd Frank Act.

Visa also says there are 1 million merchant locations with chip-enabled terminals, or about 20% of all merchants, Ericksen says. More than three-fourths of them are small and mid-size merchants.

Counterfeit card fraud, which EMV chip cards aim to prevent, is down at the five top chip-enabled merchants by 18.3% from the fourth quarter of 2014 to the same quarter in 2015. That contrasts with the top five non-EMV merchants, which saw counterfeit card fraud increase 11.4% in the same period.

Once at least 50% of U.S. payment card transactions are made with chip cards at chip-activated terminals—in a so-called chip-on-chip transaction—fraud rates will begin to decline, Ericksen says. “That’s where we start to see occurrences of the counterfeit card fraud trend line go down overall.”

 

source Digital Transactions


Vantiv takes a pass on Daily Fantasy Sports

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Top 10 acquirer Vantiv Inc. seems to have done that. In the face of increased state scrutiny of daily fantasy sports operators, Vantiv decided to suspend all processing of payments for these firms effective Feb. 29, 2016. Vantiv is said to be the largest provider of acquiring services for these businesses.

Daily fantasy sports is a turbo-charged version of the original. Instead of lasting an entire season, like traditional fantasy sports games, though, participants draft players for teams that play just one game and compete for cash prizes. Several state attorneys general recently issued cease-and-desist orders to the online companies behind daily fantasy sports games, asserting the games amount to illegal gambling. And, in fact, six states have ruled the games illegal.

Vantiv President and Chief Executive Officer Charles Drucker addressed the company’s decision to exit this particular aspect of the business in a Feb. 3 earnings call. “We have decided that it is prudent to suspend processing for transactions involving daily fantasy sports due to the increasingly uncertain regulatory and judicial environment around these operations,” he said. “We may re-enter the space in the future should conditions change.

“In the meantime, we remain firmly committed to processing for online and land-based gaming operators, including state lotteries and other regulated gaming activity where the regulatory and judicial frameworks are more clearly established.”

 


EMV: Merchant Migration Slower Than Anticipated

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Only 37% of U.S. merchant locations are fully equipped for EMV card acceptance, narrowly missing a projected 40% rate of deployment predicted by management consulting firm Strawhecker Group, according to research it published Wednesday.

The current study showed payment processor readiness, gateway readiness, and technical staff resource availability affected the speed of implementation most. The card networks set an Oct. 1, 2015 date for EMV adoption, after which non-compliant parties faced a shift in fraud liability.

Jared Drieling, business intelligence manager at TSG, anticipates a faster rate of implementation by merchants who delayed to avoid any changes to the payment process ahead of the 2015 holiday season.

“It appeared that some merchants delayed EMV migration completely until the holiday season ended to prevent friction and confusion at the checkout line,” he said in a Feb. 17 news release. “I suspect that many merchants that have delayed, especially merchants in higher risk categories, felt the impact of the liability shift last year and we’ll see them aggressively ramp up plans to migrate.”

TSG said it expects 50% of merchant locations to be able to accept EMV cards by June, and 90% in 2017.

TSG sampled 92 payments services providers that service almost 4 million merchants, or 50% of card transactions.

 

CardWorks Merchant Services is offering FREE upgrades to EMV equipment for all merchants new and old.  Reach out to your sales agent or our Merchant Support Team (merchantsupport@cardworks.com) for more information about becoming compliant today!

 

 

Source: PaymentSource


NRF applauds Senate consideration of e-fairness legislation

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Washington, Feb. 9, 2016 – In response to comments from Senate Majority Leader Mitch McConnell today that Internet sales tax legislation would be considered by the chamber during the current session of Congress, NRF Senior Vice President for Government Relations David French said:

“Retailers applaud e-fairness champions Sens. Dick Durbin, Lamar Alexander, Mike Enzi and Heidi Heitkamp for continuing to push for action on removing the government-imposed sales tax advantage that Internet sellers enjoy. Leader McConnell’s plan to work with his colleagues to facilitate a Senate vote on e-fairness legislation this year is a promising step forward, and it helps to ensure that the important Customs conference report can now proceed in the Senate. Retailers across America urge Congress to finish the job on e-fairness before more Main Street businesses are forced to close their doors due to unfair tax preferences.”

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. NRF.com .

Source: Company press release.


Datacap Releases Certified TSYS US EMV Solution for Point of Sale

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Datacap Systems, a leading integrated payments middleware provider, has completed US EMV level 3 certification with TSYS and has released an EMV-capable version of NETePay™ that’s available for download today. NETePay for TSYS provides PC-based point of sale providers with the ability to deliver US EMV functionality via an evolving list of PIN Pads and simple out-of-scope interface.

NETePay for TSYS supports host-based tip adjustment for US EMV transactions, making it ideal for bar and restaurant applications. The initial release of NETePay for TSYS is certified to utilize the VX 805 PIN Pad from Verifone that supports EMV, MSR, PIN and NFC contactless transactions. Additional hardware options supporting mobility and point to point encryption will be available as Datacap completes queued device certifications.

“We’re excited to announce our latest US EMV certification with TSYS,” commented Justin Zeigler, marketing director at Datacap Systems. “Perfect for table-service restaurants, the host-based TSYS Summit platform supports US EMV tip adjustment and tokens so merchants can continue to handle gratuities without forcing the update to mobile devices.”

This release adds yet another processing option to Datacap’s current EMV-certified versions of NETePay which to date include Mercury, Vantiv, Paymentech, Sterling Payment, First Data Rapid Connect and TSYS, with more to follow. In advance of the release of Datacap’s Tran™ apps, embedded POS providers can utilize Datacap’s PDC™ to communicate with an EMV-enabled version of in-store NETePay today.

About Datacap Systems
Datacap Systems celebrates 32 years of successfully designing, manufacturing and marketing innovative integrated payment solutions. One simple interface allows Point of Sale developers to keep pace with evolving trends and payment industry standards, so they can spend development dollars on POS innovation rather than integrated payments. Because we sell our products exclusively through authorized POS resellers, merchants receive high-end payment solutions coupled with top-tier installation, service and support. Integrated payment solutions from Datacap are utilized by hundreds of POS applications in an array of vertical markets.

For more information about integrating Datacap Systems into your business, please contact CardWorks Acquiring today!


In a First for Debit Networks, Shazam Adds a Mobile Feature to Shut off Lost Or Stolen Cards

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In the wake of the arrival of EMV chip cards and ahead of the holiday shopping rush, the Shazam debit network has launched a mobile feature that lets cardholders disable their debit cards should they be lost or stolen.

While networks like Discover Financial Services have advertised a similar feature for credit cards, the new Shazam feature, which is part of its Bolts mobile app, is the first of its kind for a debit network, a spokesman for the network tells Digital Transactions News. “You just click a button and [the card] is off,” he says. “It’s attractive for consumers and financial institutions because that’s less fraud for them.”

Since the service went live at the end of September, it has blocked some 600 Shazam cards. As the holiday-shopping season approaches, the network expects many more will be switched off as cardholders lose their cards in the shopping frenzy. “As the volume goes higher seasonally, it stands to reason there’s more potential” for lost-and-stolen fraud, says the spokesman.

The feature, whose formal name is Bolts Transaction Control, is rolling out to the network’s 1,300 member financial institutions and is one of three services available for Bolts, a mobile app Johnston, Iowa-based Shazam launched in January 2013. The other two are transaction alerts and peer-to-peer payments, a service Shazam added this summer.

So far, about half of the Shazam members have integrated Bolts and have added Transaction Control. Those banks account for some 1.3 million debit cards out of the network’s total of 4.9 million active Shazam-bugged cards. Of these, just over half a million are now active on the new service.

For the rest of this story by John Stewart, head to DIGITAL TRANSACTIONS.


TSYS and Ingenico Group to Offer New Semi-Integrated EMV Solution

 

 

TSYS TSS, -1.12% a leading global payments provider, and Ingenico Group , a global leader in seamless payments, today announced a new semi-integrated solution to simplify the EMV [®] certification process. TSYS is the first processor to Class A certify Ingenico Group’s new offering, which is designed to enable partners with the ability to easily build and deploy secure EMV and NFC solutions.

The combined TSYS and Ingenico Group offering provides Value-Added Resellers (VARs) and Integrated Software Vendors (ISVs) with a simple and secure pathway to begin enabling EMV payments. This easy-to-implement solution empowers VARs and ISVs to focus on developing their core products, while offering them a secure method for accepting payments, including magnetic stripe, EMV and NFC contactless payments.

Using a semi-integrated approach, communications between the PIN pad and point-of-sale (POS) system are limited to non-sensitive exchanges, preventing card data from entering the POS. By taking the POS out of the payment flow process, not only are EMV certification and PCI compliance simplified, but overall costs and time required for EMV implementation are reduced as well. Fully certified through all major card brands, this new TSYS-certified solution also has the ability to process with TSYS Guardian Encryption [SM] , ensuring payments are both reliable and secure.

 

For the rest of this article, head to MARKETWATCH.

 

For any further questions about the exciting advances with Ingenico products, please contact CardWorks merchant support:

(866) 210-4625 X1

merchantsupport@cardworks.com