Retail IT: Scan and swipe not enough

Dawn Marie Yankeelov is attending the National Retail Federation’s Big Show in NYC this week. Here is her first report.

From the packed show floor of the National Retail Federation’s Big Show in NYC earlier this week (24,000+), retail IT is bursting with exciting challenges from global payments to the right middleware for trusted exchanges.

VeriFone has put together a series of partnerships that today may seem exclusive to the top innovating retailers, but will soon be business as usual for all of retail IT.  70 percent of all endpoints in U.S. retail transactions are handled by VeriFone, according to Dave Talach, Vice President of Strategic Partner Development, and formerly a lead in the product development team.

“Security is our pedigree.  We believe encryption at the point of swipe, and the value of payment card industry standards.  We are pushing AES encryption,” he said.

VeriFone’s patented, format-preserving VeriShield Hidden Encryption (VHE) uses sophisticated AES encryption and enables existing payment applications to deal with encrypted cardholder data that is unusable by hackers, but does not impact existing transaction message formats.(ECC, (elliptical curve cryptography) is still the bleeding edge in security technology and not ready for prime time in retail environments, he said.)  The most important focus in retail IT for the CIO is the question of data in transit.  Don’t expect de-encryption at the tablet level in store. The “what about this” questions for CIOs for 2012 include:

  • What are we going to offer-ISIS, Google Wallet, Paypal-in the checkout process?
  • What middleware fits?
  • How are we going to handle encryption?
  • What hardware is going to have to change?

Talach claims that most implementations in the global pay space will get done in a six to eight month cycle from start to finish.  He is somewhat bold in predicting that all stores will offer mobile payments in the next 24 months, but cites the activity his company is seeing in both current publicized activity and booked activity.  VeriFone is working with Google, for example, to deploy Google Wallet, already installed in American Eagle Outfitters, Bloomingdales, Macy’s, The Container Store, and Toys R Us.  Smaller brands like Guess, Pacific Sunwear, and C. Wonder are also looking at new mobile point-of-sale systems for engagement with customers.

GlobalBay was a recent acquisition in late 2011 for VeriFone, in order to make sure mobility is addressed with a middleware option. The VeriFone GlobalBay product suite provides a number of retail apps such as mpos, ipad retailing, clienteling, and inventory management software that connect into existing back-end systems from companies such as Oracle, IBM, SAP and Epicor.

“The CIO must look at the convenience of investing in the future now. An asteroid is coming to the traditional point of sale. No store wants to just do scan and swipe. The goal is to get the units per transaction from say 2.5 to 2.93,” said Sandeep Bhanote, vice president and general manager of Mobile Retail Systems, now for VeriFone. He co-founded Global Bay. He explained the distinction for CIOs in open standards for integration, which VeriFone embraces. Managing for customer satisfaction, is now the CIO’s issue, he contends. “As a CIO you are now into the world of behavior management,” he said.

This IDC Flash discusses Nimble Storage’s introduction of an all-flash array (AFA), the AF-Series, as an addition to the company’s already very successful CS-Series line of hybrid-flash arrays (HFAs), on February 23, 2016, as well as Nimble’s entry…

If the CIO role has taken on some of the broader aspects assigned to marketing—behavior management, the next level of questions for a CIO to ask include:

(a)  What is the level of engagement security?  What is the RFQ asking for?  Security must be important.

(b)  Can the company really provide an end-to-end solution this year?  And how are we going to do this?

(c)  Hardware must be married to middleware with encryption, so what are the new use cases for software integration, to the level of customer?  Is there really a need to add more software or just adapt for mobile?

The good news for CIOs is that interfacing mobile payments and customer satisfaction management into apps for mobile deployment are not as expensive as they once were.  The Google Wallet technical side is somewhat secretive, according to Talach, but the courting process has begun to get retail IT onboard and “in the know.”