Verifone CEO On Retail’s Future

Though much attention these days is given to the plight of retails in a digitizing world, in his fireside chat with Karen Webster and Innovation Project (IP) 2017, Verifone CEO Paul Galant gave IP delegates a critical retail reality check.

It hasn’t suddenly gotten really hard. Retail has always been a highly competitive, extremely challenging race to capture the hearts and minds of the American consumer and then translate that affection into actual sales.

When it comes down to talking about the facts of commerce, as opposed to “the hyperbole,” the brute reality is that an essential fact about retail hasn’t changed: The brands that have clarity and understanding about what their consumer wants and how they want to get it tend to win; the brands that don’t lose.

“Those that understand consumers are doing well. They are doing well in malls, and they’re doing well online and on mobile and at sporting events, because winning now is being able to capture the information, understand it and ultimately use it to connect with consumers.”

That doesn’t mean that retail hasn’t changed — or isn’t in fact changing as you read this. Galant noted the goals of retail haven’t changed — nor have Verifone’s three main goals when it comes to providing payments.

“Security, ubiquity and interoperability,” Galant noted are what Verifone first, last and always provides for retail and financial institution partners.

But the road to providing that is changing — both for retailers and for Verifone. Which means that though throughout its history Verifone has been a hardware company, it is attempting to reinvent itself to better answer retail’s reinvented needs.

“My mission-critical objective for Verifone is turn it into a solutions company that leverages our leadership position in hardware” Galant noted. “If you look back at history, the purpose-built payment terminal solved a pressing need — that was the innovation. It was a box — it did its job very well. That was the beginning, middle and end of what we did. That is not our core value anymore.”

Old Problem, New Solution

Fundamentally, Verifone’s goal is to allow merchants to think about the side of the business they’re really good at — commerce — while leaving the complicated world of payments — particularly securing that commerce — off their plate.

“What you’ve seen in the last few years has really been certain retailers, banks and acquirers having to do a lot of heavy lifting because companies like Verifone didn’t keep up with the changing times.”

With merchants today selling and accepting payments in a lot more places than just from a checkout countertop terminal in a retail location, they require more than payment terminals designed for a commerce world that was 100 percent brick-and-mortar. In a multichannel world evolving to become an omnichannel world, Verifone now wants to be a full-stack commerce platform — with software solutions that allow retailers to really do what they want and need to do to serve their customers without having to be bogged down in the payments workflow and security.

“Omnichannel starts with something very boring,” Galant said,” which is fastening together back-office functions in a seamless way.”

It may be boring, Galant continued, but it’s that boring functionality that gives retailers what they need: real-time insight and data about what’s happening online, on mobile and in-store. Verifone’s software makes those connections possible across channels — and in a way that allows their retail partners to avoid the heavy lifting.

“In 10 years, retail will be even more of a data platform business that understands consumers with greater detail and color in real time. And turning that insight into an experience that is on-par with the best online shopping and payment solution is mission-critical. Retailers will need to dynamically alter the experience of consumers on a mass-personalized basis across all interactions and sales channels. This platform effect It creates a feedback loop that allows for constant self-learning,” Galant said.

And for a system that is always evolving.

The Changing World

That’s important, Galant noted, because in a very short span the world has changed greatly and is only going to keep changing.

But, he cautioned, it’s awfully easy to “get out over our skis” and start assuming that changes are going to be more fundamental than they are.

Quick-service restaurants’ (QSRs) rapid switchover to order-ahead is a good example, Galant said. He posited that order-ahead is absolutely changing the face of the entire quick service food market and will likely continue to do so. But, he noted, that doesn’t necessarily mean that the predictions by some — that counter-based point-of-sale devices are about to be no more at QSRs — is necessarily correct.

“The drive-through was a great innovation, and at chains that have them, 70 percent of orders go through the drive-through instead of [going] in-store. But payments is an ‘and’ business — it won’t be about replacing one form factor. There are some meaningful disadvantages to any retailer that moves too much to one way of doing things. Consumers like choice — and our job at Verifone is to enable a platform that is as secure and stable no matter what choice the consumer makes.”

And, Galant said, enabling consumer choice is not just a U.S. goal — Verifone is also looking at an electronic payment world that has gotten much, much bigger in terms of the number of consumers that it serves. It’s growing very rapidly. One great example is India.

“It is an environment where they are open to working with a global company like Verifone. Demonetization was a bold move and recognition that India has to open up commerce in a way that reduces fraud and allows the government to collect taxes.”

Galant notes that he will sell a lot more devices in India but that the real opportunity will be in opening up the Indian services market and working to build out a fully digital payments system from the ground up.

“It is going to be a massive service market for Verifone — it will allow us to partner with many of the great acquirers both in India and global players coming in to help the country to be able to take what today is a cash society and turn it into an electronic payments platform across any form factor.”

And that while India is a dramatic example, Galant said on a smaller scale all over the world, if Verifone is doing its job right over the next few years, there will be many such stories of transition.

A transition Galant said that Verifone, with its platform and massive international scale behind it, is committed to accelerating and guiding.