PayPal And Microsoft Punch Up The POS

Who said that the mPOS market was all locked up?

Certainly not PayPal and Microsoft, who announced yesterday (Jan. 12) that its PayPal Here mobile app and card reader for merchants now supports Microsoft Surface and other Windows devices as part of its new partnership with the Seattle-based technology company. In addition to giving merchants a robust new option at the POS, this new partnership will give the 20K Windows developers a whole new platform to create and drive innovation in the retail sector.

So why PayPal and Microsoft, and why now?

Targeted to SMBs initially, this new POS platform offers a variety of options for merchants who want the power and familiarity of a Windows OS platform integrated with a robust POS system. The PayPal Here/Surface platform offers all of the power and functionality of a Windows OS computing platform, all of the portability of a mobile POS device, and all of the utility and convenience of a tablet, including the ability to use a stylus to write on the screen and sign.

A variety of hardware options give merchants who want it a fully functional register and cash wrap, USB ports that can enable separate card swipe devices for higher volume merchants, scanners, printers and other peripherals.

PayPal Here’s role is to enable checkout efficiently, cost effectively and anywhere that’s convenient for merchants and their customers as well as to establish a cornerstone for the integration of that payment with other value added services like loyalty, demand and accounting/inventory management. The emphasis, according to PayPal’s GM and North American Head of Retail, Brad Brodigan, is to push checkout “as far to the back as possible” in exchange for a better consumer/merchant experience where payment is critical, but not the driver of the experience.

For many small business owners who want one single POS + computer system that “does it all,” the Suface/PayPal Here combo is seen as a welcome addition to their business.

One such business is Bridal Boutique, one of Dallas’ tiny bridal shops. A family business that’s been around for more than 25 years, the family-owned business made the decision to install the Surface/PayPal combination for one reason and one reason only: to close the sale of bridal gowns bought by very emotional brides-to-be the very moment they’ve said “yes to the dress.” With growing pressure from e-commerce sites, and roughly 25 percent of their brides-to-be customers leaving the store without making a purchase, the ability to seal the deal on the dress in the comfort of the dressing room was a huge driver of their decision to make a switch.

However, any POS change is complicated and not without its hassles. For Bridal Boutique, whose staff is PC and not Apple proficient, a tablet that didn’t run a Windows OS, for them, was out of the question. Also, the ability to essentially make a single investment and get both a POS system and a powerful computing system with a fully functioning keyboard, well, sealed the deal for them. Since installing the new system, they’ve noticed a tangible improvement in their business results and a better customer experience for the brides-to-be and their bridal parties.

Brodigan was quick to point out that PayPal Here was designed with small businesses in mind, SMBs that, in particular, needed more ways to accept payments in store or on-the-go from customers who just wanted to close the sale. However, he also emphasized the need to collaborate with smart technology leaders in order to give them the best overall retail services portfolio – thus the partnership with Microsoft and now the integration with its Surface Pro 3 tablet, the Lumia 830 and 635 smartphones, and other devices that operate Windows 8.1.

“Small businesses that use the PayPal Here reader, Windows 8.1 app, and SDK on these devices will benefit from the same world-class product features and customer support enjoyed by existing PayPal Here users,” PayPal wrote on its blog when announcing the partnership.

Also key to this partnership is the PayPal Here SDK that will allow SMBs to customize their POS environments to enable a wide variety of payments methods, loyalty, inventory and CRM and customer acquisition capabilities. Also as part of this announcement, Microsoft and PayPal have said that they will work with ISVs and developers to create custom business apps for the Windows SDK platform.

PayPal’s plans also include extending PayPay Here’s EMV capabilities to iOS, Android, and Windows. According to the company, the PayPal Here app and EMV card reader have “helped contribute to an 80 percent drop in card fraud in the U.K. and Australia.” Certification is expected by the end of the summer.

“An updated PayPal Here reader is being developed to support EMV and contactless transactions for small businesses that connect to mobile devices via Bluetooth, enabling them to accept any chip card, magnetic stripe card, or contactless payment form, including mobile wallets,” PayPal wrote.

Security, which has always been the core of the PayPal value proposition, remains front and center in this partnership as well. PayPal said, “All transactions will be processed using the same high security standards as the PayPal Here app, giving small businesses peace of mind that they are receiving best-in-class fraud protection,” PayPal said.

This announcement builds on the announcement yesterday that offers merchants a wide variety of transactional credit options and business solutions that help improve their businesses and increase sales.

“While 2015 has just begun, the opportunities for small businesses this year already seem boundless. We look forward to playing an even bigger role in helping small businesses succeed.”

Here’s the video PayPal released Jan. 13 to promote the partnership: