While the courier service industry has already taken the first steps towards implementation thereof, the public transportation projects have been put on hold or cancelled.
“The segments not served until now, the parcel delivery services and public transportation, are becoming more relevant for the market,” Dragos Chivu, general manager of Printec Romania, the main provider of POS and ATM solutions on the local market, told ZF.
There are almost 130,000 POS-es installed at retailers in Romania, which process more than 5.6 billion lei (EUR1.3 billion) worth of payments, according the data provided by Romania’s central bank in mid-year.
The growth driver of the card acceptance terminal market is the contactless POS-es, which use the NFC (near-field communication technology).
“Contactless POS-es are driving a change on the market encouraged by both payment schemes and retailers, in view of later integration with Apple Pay type systems and also because of payment incentives offered for contactless card transactions or for transactions conducted via contactless POS-es,” Chivu said.
The number contactless cards issued in Romania currently stands at about 500,000, two or three times more than last year.
Mobile POS-es, on the other hand, have not seen an increase in sales and implicitly deployment, which could come once the distribution channel changes. Retailers currently receive their payment acceptance terminals from banks free of charge along with a service package.
“The corporate customer divisions of the mobile telephony companies are interested in promoting mobile POS-es along with their service packages,” Printec Romania’s general manager said, adding one customer segment the companies might target is the taxicab drivers. They could get a tablet, the taxi calling application and the POS terminal in one package.
Public transportation is the next sector to stimulate growth of the local card acceptance terminal market. People riding a bus, tram or the subway will be able to pay for the trip by card via contactless POS-es especially designed for use in such vehicles.
All the projects in the public transportation sector that were supposed to begin in Brasov, Cluj and Bucharest this year have been cancelled or postponed, Chivu said.
Another development trend for the market is the purchase of POS-es by retailers themselves and integration of customer loyalty reward system into them.
“Retailers might begin to buy the POS-es themselves and choose what bank to connect to,” said Velin Ganev, deputy general manager and shareholder of Danubius Exim, sole importer of Datecs cash registers and POS and card readers distributor.
Major retailers abroad buy their POS-es themselves and develop their own customer loyalty reward applications and other types of payment, he added.
Printec Romania’s general manager confirms, as his company has already implemented a customer loyalty reward system for POS-es for the Turkish Anchor group, which owns Bucuresti Mall and Plaza Romania in Bucharest.
Under the circumstances, banks might stop buying card acceptance terminals and choose to outsource POS related services. The step might come as a result of the passing of the bill on cutting bank fees for card transactions.
Banks will consider outsourcing the service to payment processors, as they do abroad. Transactions from several banks go through one processor and, in theory, the retailer has lower costs regardless of the card with which the customer pays, Ganev said.
A POS starts at EUR100 and may cost as much as EUR500 to EUR600.
Fan Courier, the leader of the local courier service market and Cargus Urgent Curier, the second leading company in this business this year started investments in projects that will enable customers to pay by card upon delivery, the officials of the two companies said during a special ZF Live broadcast from the Tecomm conference in Cluj Napoca last week.
Cargus Urgent made the decision to invest in mobile POS-es because research showed more than half of the customers were ready to drop cash for cards and delivery personnel experience showed customers often do not have enough cash or the exact amount they have to pay upon delivery and need change, said chief executive Gian Sharp.
Cargus Urgent signed a partnership with MasterCard and will issue POS-es to all its 1,100 delivery people, which means 1,100 terminals. It has already tested the solution in Bucharest and will implement it throughout the entire company in the first quarter of 2015, Gian Sharp said.
Cargus Urgent’s project is the one of the few in the region, said Gabriel Ghita, MasterCard Europe’s head of operations for Central and Eastern Europe.
“There is huge demand for this service (payment by card upon delivery i.e.),” Ghita said.
Fan Courier, the leader of the local courier service market, is getting ready to issue POS-es to its delivery people, too, a decision prompted partly by the surge in deliveries generated by online stores, whose customers are ready to pay by card on delivery, said Adrian Mihai, business development manager with the company.
“The online area has developed a great deal in the last few years. Whereas it used to generate less than one percent of our revenue five or six years ago, I think shipments from online retailers will account for more than 30% this year,” Mihai said.
The share of orders generated by online companies has significantly increased. The parcel delivery market is on the rise, with growth ranging from 20% to 30%, which probably makes it the industry with the highest growth in Romania in 2014, he added.
Netopia Mobilpay, one of the largest local payment processors, will develop its own electronic wallet application enabling users to pay for packages delivered to them after checking them, said Horia Grozea, card payments director with the company.
“We hope the new projects like MasterCard’s partnership with Cargus Urgent will move the market. We will soon try our electronic wallet application that will enable customers to pay for products upon delivery.”
(English version by Loredana Fratila-Cristescu)