Snapshot of what I'm passionate about...

Can you share a bit about your background in POS and payment processing in general?

My first foray into payments processing was by writing POS applications for Visa, MasterCard, AMEX, and Discover. AMEX is a closed-loop processor, so POS applications had to also support split dial payments. I then went on to work on the networking stack connecting POS terminals and backend servers. This provided me exposure to multi-lane environments such as grocery stores and amusement park environments where there are multiple transaction channels including checkout lanes, kiosks, merchandising, ticketing, and more. The system aggregated all transactions for settlement at the end of the day through a central server. The first POS mobile application I worked on was for taxi cabs in one of the APAC countries. We had to deal with challenges such as signal strengths between tall buildings, and driver training.

Working on the server side was the logical next step which reinforced the importance of availability, reliability, fault-tolerance, uptime, and consolidated reporting. From there, I went on to work on clearing and settlement for high-end hotels, and learned about how to intermediate transactions the right way to add tremendous value. My team basically analyzed and re-qualified transactions back to the processors to negotiate a better rate for these large merchants that have pretty tight margins. Finally, I joined PayPal, which is an online culmination of all those functions, so that was a natural progression for me. 

What factors do you feel are important for successful and mass adoption of new digital wallet programs integrated with brick & mortar POS infrastructure?

Infrastructure: The first requirement for mass adoption is minimizing change in the POS infrastructure. The change is very costly and labor intensive, as it would sometimes require recertification of hardware and applications with the various processors/associations. The offering has to be simple, straight-forward, and easy to understand, and perhaps focus on specific niches that will allow learning from our customers, and rapidly iterate and improve the offering. 

Value proposition: The solution must also add value for the customer, so they see the benefits of changing their habits. As you know, swiping a credit/debit card at a POS is second to nature and very convenient. How can we make it compelling enough to change consumer behavior to use phone#/pin for example? A POS transaction is a much more powerful concept that transcends the money aspect. There are various services that can piggy-back on the money transaction that will add value to the customer. We are used to credit cards, we’re trained, and we’ve been doing it for decades. However, if we add value to that transaction, then it makes all the difference. Adding benefits such as stored coupons in the digital wallet, merchants’ reward/loyalty programs, and a digital receipt store for returns/exchanges. All these benefits can be enabled

as part of the transaction, paperless, within my digital wallet.

It is difficult to estimate when new technology, such as NFC/mobile payments, will become main stream. When do you think that will happen?

The POS industry in the US has very strong fundamentals that have held true for the majority of the 80s, 90s, and most of the 2000's. We are seeing a shift in the last couple of years that will change the game, powered mainly by the proliferation of smart mobile devices. We are seeing an appetite to retool the POS infrastructure with chip card/NFC enabled terminals. That, coupled with the introduction of mobile phone peripherals such as Paypal Here mobile card reader will allow easier integration from the online to the offline transaction environments. On average, US consumers change their phone every 18-24 months, so I believe we are probably about that far away from achieving critical mass of consumers equipped with smart phone and “smarter” terminals that our customers can use. 

Shifting gears a bit to talk about latency, which is a primary concern especially in the offline world. Site speed is paramount when we look at the online/web checkout experience. Can online capabilities be leverage to improve performance for the offline market?

I would answer this from two perspectives. Site speed is mainly focused on improving the stack for the online shopping experience. Transaction API performance is another dimension, which is geared towards both environments, but is especially important for the offline world. If we look at the major processors, the payment authorization is super-lightning fast. They apply the minimum amount of risk analytics, with the understanding that they will deal with the capture when and if it comes. 

When we talk about latency offline, we need to be mindful of the components of the transaction processing flow that contribute to the latency; the authorization latency is not the only latency that will add to the overall transaction response. In a multi-lane environment, there is a store concentrator that connects to a gateway, in addition to other hops, before it gets to the issues. So if authorization takes a second, and the multi-lane latency up and down the chain is adding one more second, we just added two seconds to the overall transaction response time, which is unacceptable. 

The other critical requirement is consistency; no matter when the authorization request comes in, the response has to be within SLA, even at peak times when our customers are lined up and ready to checkout. Those principles apply for both online and offline, but are more relevant offline. 

Do you have any parting thoughts that you want to leave us with? 

Engineers are enabled more than ever to play a critical role, sitting at the table with business and product partners to develop the right solutions. I firmly believe that Engineering can be enhanced by orders of magnitude when coupled with industry knowledge. This is because we are not just producing solutions or code without considering the customer’s buying habits and operating environment in which that transaction is going to take place. This is , in my view, a must have, because this is the only way we can sit at the table with product and come up with compelling requirements and products that our customers will love.