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UNLOCKING THE POTENTIAL FOR UNATTENDED PAYMENTS

Our focus on customer driven, practical innovation, creates new solutions with greater exibility, broader integration, easier use and longer eld life.

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Executive Summary
Within the self service market there is a need for greater exibility, device longevity and acceptance choice in an increasingly convenience-focused market where unattended solutions are set to rise. New innovations including interactive services, multimedia output and online connectivity require ergonomically superior components that are up to delivering the exible functionality of todays service orientated kiosk, ticketing and self-service applications. In addition, new levels of efciency and resilience need to be delivered in order to achieve longer, more productive eld life. This paper demonstrates how VeriFones new UX Solutions have been congured and designed to meet the needs of the challenging and complex unattended market. It will also outline how VeriFone can help customers and third party integrators to develop and rollout new solutions to grow their business more protably within both new and existing markets.

Its the small details that deliver big differences. Our next generation of unattended modular components are designed to overcome deployment barriers, drive greater protability and enable a new breed of fast, powerful and interactive self-service machines and kiosks that will transform the self-service market.
Andrew Banks, Head of Petro & Unattended, VeriFone Europe

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The Unattended Market is Expanding

Shifting consumer attitudes to technology and service coupled with seller organisations requirements for greater operational efciency and protability are set to fuel a new phase of growth within the unattended payment space. As demand for faster, easier and more economical ways to accept payments for all types of goods and services continues to rise, organisations are looking for new ways to integrate and deploy self-service devices particularly those that harness new technology to improve interactivity, reach and life span in order to drive more sales and boost ROI. This includes touch screens and multimedia and functionality that can link the online with the physical sales experience, as well as NFC which will not only allow consumers to pay by phone but which can boost value added services such as e-vouchers, loyalty apps and promotions.

Key Market Drivers

The following outlines the primary drivers that are creating new opportunities for unattended payment devices:
CONSUMER DRIVERS
Convenience - speed, availability, location Enablement - techno-savvy Shift to e-payment - fewer consumers carrying cash Desire for control and privacy

OPERATIONAL DRIVERS
Reduced costs - lower overheads, fewer staff, Improved service - queue busting, add ons, accessibility Increased revenue - reduced walkaways, locational advantage, new markets

DRIVING MORE UNATTENDED PAYMENTS

TECHNICAL DRIVERS
New payment types - contactless, NFC and mobile payments New interactive opportunities - multimedia, touch screens, NFC More robust designs and materials More robust designs and materials touch screens, NFC New interactive opportunities - multimedia, NFC and mobile payments New payment types - contactless,

SOCIAL DRIVERS
Demand for 24/7 services in challenging environments Overcome issues of crime/vandalism Provide more services to more people, more of the time more of the time Provide more services to more people, Overcome issues of crime/vandalism environments Demand for 24/7 services in challenging

TECHNICAL DRIVERS

SOCIAL DRIVERS

Sustained Growth

PAYMENTS UNATTENDED DRIVING MORE

Cisco reportiv, which examined the impact of automation, accessibility Improved - queue busting, add ons, self-serviceservice and omni-channel shopping experiences Reduced costs - lower overheads, fewer staff, and consumers views about providing their personal OPERATIONAL DRIVERS information in exchange for more personalised service, 61 per cent of global consumers are open to shopping at a fully automated self-service store with vending machines and kiosks offering a virtual customer service. Additionally, 52 per cent prefer self-checkout stations in order to avoid waiting in line to make purchases.
locational advantage, new markets Increased revenue - reduced walkaways,

terminals from both consumers and retailers . Similarly, CONSUMER DRIVERS a new study from London-based research rm RBRii tallies the total shipments of self-checkout terminals to 27,000 for 2012 and forecasts that this will rise to 60,000 devices by 2018. The study also suggests that the increase of self-checkout technology will correlate with retailers pursuing increasingly diverse approaches to self-service. And its not just high volume retail applications that are beneting. An industry report from Research & Markets forecasts that the global interactive kiosk market will grow by nearly 15 per cent over the next three years.iii Without doubt consumer attitudes are inuencing much of this investment. Interactive technology is eliminating one of the prime challenges facing self-service the personal contact that builds loyalty. Consequently, many retailers are using personalised automation to win the wallets of global consumers. According to a recent

Desire for control and privacy carrying cash Shift to e-payment - fewer consumers Research from the Mercator Advisory Group, points Enablement - techno-savvy to a sustained increase in demand for self-checkout Convenience - speed, availability, i location

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Exploiting Opportunities
Enabling drivers, operational demand and heightened consumer acceptance is creating a new pervasive marketplace for unattended solutions from petro, parking, mass transit and ticketing to retail, kiosks and vending. Wherever payment acceptance is required quickly, securely and with maximum convenience there is a need for unattended payment devices. However, for self-service equipment providers and integrators to fully exploit these opportunities to the full and meet future demand from government, merchants, hospitality, transit and other commercial organisations, they need payment components that can accommodate diverse applications, markets and environments and which are easy to integrate. They also need to invest in solutions which offer longer life cycles and slower obsolescence and, where required, that can deliver new services, payment types and value added services to the consumer.

UNATTENDED MARKETS

PETRO

UNATTENDED COMPONENTS

KIOSK VENDING

PARKING

TICKETS

A Unique Market with Unique Challenges

Reliability and ease of use are essential for any unattended application. Regardless of how self-service machines are used or the goals for deploying them, if they dont serve customers consistently and conveniently, they wont deliver benets. That means designing solutions that can cope with the extreme, diverse and often remote environments in which they are placed. Unlike attended retail based point of sale systems, unattended machines require a great deal of complex mechanical integration which is highly dependent on the application and location. This can include signage, dispensing, printing, scanning, tethering, vandalproong and weather-proong systems as well as remote power supplies and connection not to mention payment acceptance. This creates many unique challenges for those involved in providing integrated unattended solutions. Some of the primary external factors that impact unattended payment component design include:

Environmental Issues
Often installed in outdoor situations, unattended POS often have to cope with location based hazards such as wind and rain, extreme temperature ranges, direct sunlight, dust and pollution and of course vandalism, misuse and crime. The build criteria for components, therefore, has to be exceptionally robust and rugged enough to withstand repeated and arduous use in the most severe conditions.

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Remote Communication
Connecting POS devices is vital in terms of authorising e-payments, enabling EMV and delivering interactive and information based services to the consumer. In the case of kiosks that vend as well as accept payment, communication is also vital to provide stock status and data. Within unattended environments, connectivity can be restricted, particularly in outdoor locations. Modern solutions must be able to provide a exible array of options to ensure that they can be utilised in the broadest of applications. This includes LAN, multiple USBs, MDB, RS232, RS485 and wireless options like PSTN, ISDN and GPRS.

User Interfaces & Multimedia

The way user interfaces are dened within the kiosk and unattended industry is undergoing dramatic revolution. The proliferation of colour displays and touch screens has not only created a new consumer expectation, it has also helped drive the cost of enabling technology down. While, in the past, this type of smart functionality did not constitute a viable commercial investment, todays competitively priced components means it does. This allows the inclusion of multimedia, internet and streamed content into the unattended device.

Alternative Payments & VAS

Most banks and card issuers in Europe are committed to driving mass adoption of contactless technology. Facilitating faster payment channels, contactless offers retailers a nancially viable and attractive alternative to coin transactions within the kiosk and unattended environment. While contactless offers an immediate platform for kiosks, it is the future introduction of Near Field Communication (NFC) enabled mobile phones and the realisation of the mobile wallet that could stimulate major investment in new kiosk platforms. It wont be long before NFC and contactless kiosks are being deployed across Europe encouraging users to use cards, mobiles, key fobs and stickers as a means to pay for kiosk services. NFC is an exciting development for self-service. Not only does it speed up the payments process, it also allows a two-way dialogue with the consumer. It provides a way for loyalty and couponing apps to be carried on the mobile and redeemed at the point of payment. NFC also creates an opportunity to create digital footprints for the consumer allowing them to access added value and highly targeted services at smarter self-service points. NFC when combined with colour displays, touch screens, internet access and multimedia capability represents a seriously intelligent customer touch point. It is not hard to visualise the possibilities loyalty schemes, targeted electronic digital advertising, kiosk instigated mobile marketing and much more.

Form Factors & Constraints

To ensure rapid uptake of new payment types such as contactless and mobile payments, acceptance components must be easy to integrate within existing form factors to keep investment and upgrade costs as low as possible. At the same time, they must be energy efcient and able to work with limited power requirements. Above all they must be easy to use and make the experience as trouble free for the consumer as possible, this includes factoring in items such as anti-glare displays, error free keypads and even video and voice communications.

Security & PCI

Security levels vary widely for existing equipment in the marketplace. Given the extended lifespan of many unattended payment devices, many early generations are still in operation today. The age of the equipment has a direct relationship to its security as many new initiatives may have been introduced since installation. Access to sensitive electronics easier on older models means many do not have tamperresistant encrypting pin pads as a standard offering. The use of non-encrypting keypads with standard mag-stripe card readers is of particular concern as it provides thieves with access to both sensitive card and PIN data with little chance of detection by the cardholder. Some industry insiders estimate the number of these vulnerable dispensers still in operation to be more than half of the current market population. Today, unattended devices must comply with all current security standards. Under this, unattended devices now have to undergo a rigorous testing and approval programme to ensure they comply with industry standards for securing sensitive payment card data during any point in the transaction process.

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New Solutions for Future Success

Within the unattended market, VeriFones customer base is predominately composed of partners, integrators and equipment operators. As the ecosystem responsible for delivering the next generation of payment devices and for deploying, supporting and maintaining their operation in the eld, they have specic needs in terms of performance, resilience and often require complex technical solutions to meet their end customer requirements. Integration of the terminal mechanical and electronic - takes time and investment. At VeriFone, research and product development teams have been working to develop a new range of component based devices called UX Solutions - which will help equipment providers to address current needs and create new opportunities to extend their customer base, services and applications. These solutions take the best of VeriFones existing portfolio of globally proven hardware and software platforms to create a new generation of PCI 3.x certied modular components that will deliver greater benet for equipment providers, their customers and the consumer. The VeriFone UX Solutions have been developed as complementary units that can be mixed and matched to suit individual applications and provide all the necessary functionality for payment acceptance and interactivity. Additionally they can be used as standalone components to enhance or upgrade existing equipment ranges depending on the manufacturers or integrators requirements. The range comprises the following modules: Card reader UX 300 PIN Pad UX 110 PIN Pad with screen UX 100 Touch screen UX 200 Contactless reader UX 400

THE VERIFONE

UX 100

UX 110

UX 300

UX 400

Designed for Life

Unlike many other devices on the market, which are adapted from retail POS designs, VeriFones UX Solutions are designed specically for self-service installations and built to withstand both outdoor and indoor conditions and use. They combine the latest developments in energy management, remote connectivity, ergonomic and interactive design, all consolidated into exible modules that can be used across most unattended applications and markets. All VeriFone UX Solutions can operate at temperatures between -20C to +70C and both the PIN Pad and contactless reader are approved to IP65 and the card reader for IP45. All devices are IK09 vandalism proof, PCI PTS 3.x certied and provide DK, CE, UL and FCC security. VeriFone believes that these modules provide everything required to implement payments within unattended environments. By simplifying the number of components required, VeriFone is able to deliver economies, scale and easy integration to reduce complexity for equipment manufacturers and integrators. This will make the creation of bespoke solutions for specic markets easier and faster without compromising resilience, security or prot margins.

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Practical Innovation Driven By Customers

Before embarking on solution development, VeriFone carried out extensive research with several key customers across primary unattended markets in order to identify which improvements would deliver the greatest benet for them. Their input has been invaluable in dening the evolution of the UX Solutions portfolio and has helped determine the many small innovations that will have a big impact on both the usability and eld life of the components. The following soundbites reect some of the discussions we have had and the UX features that have been developed in response:

Improve power management and efciency in remote installations to lower operational and maintenance costs and extend reach
The VeriFone UX Solutions features a sleep mode to conserve energy. This is combined with the fastest start-up from low power of any unattended payment device on the market, which means it is user ready as soon as a card is inserted, or in the case of contactless, tapped. Battery usage has been signicantly improved using 33% less energy than before. In addition, the UX 100 PIN pads 2.5 monochrome graphic display (128x64) incorporates a new heater unit that ensures low temperature running.

Reduce complexity and enable simpler integration so that we can expand unattended into new markets while keeping price points competitive.
VeriFone has relocated the processor and controller functionality into the UX card reader itself, so that it can be installed as a single unit making integration much faster, easier and cost-effective. VeriFones integrated payment application interface provides a better environment for OEM development and allows full integration with other physical POS systems. The UX Solutions compatible components allows manufacturers to build single solutions from the same technology vendor across all their applications.

Deliver fresh ergonomic designs that improve the consumer experience

With VeriFone UX Solutions activation is fast. Acceptance can be achieved in 2-10 seconds, which is as much as 300% faster than other devices. LED trafc lights on the card and contactless readers are designed to provide customers with clear guidance on the transaction including card reading, processing and completion. A large and embossed card symbol on the UX card reader slot helps avoid misplaced cards. An illuminated contactless logo on the card reader makes it easy to identify and lets users know that machine accepts tap and pay. A standard vending card reader cut out makes it much easier for users to insert and remove their payment card. The UX PIN pads large, laser etched and contoured text keys makes data input easier and reduces errors. VeriFones high contrast displays are more readable in daylight conditions including direct sunlight.

Maximise ROI by focusing on enhancements that extend component life.

The UX Solutions use a rugged build with maintenance-free design including metal top plates and keypads which are tested to withstand over 2 million presses. UX card and contactless readers are now certied to the latest PCI PST 3.x requirements, keeping operators compliant for longer. Inclusion of a shutter mechanism on the UX card reader protects against damage from misuse or foreign substances being inserted. A drain mechanism built into the card reader prevents external water/moisture. All connectors have been placed on the bottom side of the devices to protect against contact from moisture.

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Create new ways to boost revenue and attract consumers to our self service locations, with interactive options that facilitate compelling new services but that are still robust and easy to deploy.
The UX 200 offers a 10.4 high brightness, colour display with touch screen functionality with 4x3 aspect ratio on 1024x768 VGA resolution ideal for multimedia and digital content. It also features multiple audio and media le support (HTML5, MPEG4, H.264, WMV, AAC, MP3) as well as dual content zones on screen simultaneously i.e. video, banner advertisement and tickers. There is a removable SD card slot, integrated microphone and external speaker support available to increase options for system design and user functionality. There is also an HDMI input for external use in non-secure mode. To conserve power, an IR-Sensor or camera option can also be specied. This enables the screen to wake up and respond as soon as a consumer approaches.

With consumers increasingly moving towards electronic and mobile payments, we need easy ways to accommodate new payment formats like NFC without it impacting signicantly on unit costs.
The UX Solutions range includes a self-contained, secure contactless module that can be used to upgrade existing and new unattended equipment for contactless card, NFC and mobile payments. With the UX 400, contactless can now be integrated cost effectively within kiosk style set-ups. All of our contactless UX Solutions support PayPass and Paywave.

Help us comply with the latest security requirements, so that we can safeguard the integrity of our devices and prevent misuse of our equipment.
The UX Solutions offer the most advanced security features including support for point to point encryption and are compliant with the following industry requirements: EMV Level 1 & 2 PCI 3.x SRED (Secure Reading and Exchange of Data)

Partnering For Success

In the next few years, as technology, attitudes and economic factors drive towards increased automation, we will see unattended go from strength to strength, particularly in those environments which are geared up for high volume, high frequency transactions like ticketing, parking, transportation and entertainment. With the inclusion of easy to integrate multimedia and touch screen capabilities, we can also see unattended payments become more closely linked with added value and information based services within government, retail and banking. As interactivity increases, the self-service machine has the potential to evolve to accommodate higher end purchases, personalisation and bespoke ordering. With easier integration and lower cost operation, it is not hard to visualise the possibilities for equipment manufacturers as unattended payment machines move from distribution tools to multi-location loyalty tools capable of driving new revenue streams through electronic digital advertising, and kiosk instigated mobile marketing.

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VeriFone predicts increased investment across European markets, which will be driven by: More multimedia enabled kiosks in hospitality, entertainment and high street. Greater interactivity including touch screens, internet connectivity and voice activation. Wider acceptance for contactless/NFC and mobile payments especially in parking, ticketing and transit. New energy saving features from solar powered batteries to fast wake/sleep functions. Open loop payment stations especially in metro locations for one stop purchasing of travel, entertainment, attractions and accommodation. Wider reach and applications through even more secure, robust and better connected devices. However, as the requirements become more complex, solid vendor partnerships will be crucial in making deployment and integration a success and keeping payments safe and secure for consumers.

Providing payment solutions for over 30 years, VeriFone is no stranger to the dilemmas organisations face in balancing the cost, quality and service equation with the right services, channels and sales tools to retain and expand their customer base. While we spend more on research and development than any other payments vendor in 2012 our global R&D investment was 139M USD we are aware that this would be worthless if it took place in isolation, without the involvement and input of customers and partners. Aligning innovation with market needs and working with leading retailers, banks and acquirers as well as other technology vendors and integrators, allows VeriFone to go beyond new product and service development, to deliver practical solutions, which address the needs of our customers enabling them to remain competitive, compliant and in control in an increasingly complex market. This has helped us develop next generation tools such as our new UX Solutions designed for life, focusing on practical innovation and solutions that enable the market without increasing complexity.

i n fo-em ea@ ve r i f o ne . c o m @Veri F on e_ E M E A w w w.faceb o o k. c o m / Ve r i Fo ne

www.verifone.com

i Mercator Advisory Group report Self-Checkout Retail Terminals: Benets, Detriments, and Opportunities March 2013 ii RBR Global EPOS and Self-Checkout 2013 Report iii Research and Markets report Global Interactive Kiosk Market 2012-2016 iv Cisco Customer Experience Report June 2013

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