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VeriFone Steps from the Shadows: Now Ready to Challenge PayPal and Square
You’ve probably never heard of VeriFone, but chances are if you live in the United States and have used your credit card inside a store in the last year or so, your transaction was processed by VeriFone.
Largely offline, the company which handles the supply of in-store credit card terminals is one of the leading such players in the space; on top of that VeriFone is worth around $3 billion. Not bad for a company that touches our daily shopping lives but who is largely unknown.
Time for change
VeriFone has proven itself capable of transacting large sums of money offline for retailers and consumers but the company has struggled to define itself as a payment provider online. All that is set to change as VeriFone scales its strategic outlook to take on the likes of PayPal and mobile newcomer, Square.
Head of strategic partnerships for the company, David Talach is optimistic VeriFone can compete with the big online players, even if they’ve had a significant head start. “Our internal strategy is way more well-thought thought out than the industry perceives us,” says Talach. Whilst that is true for fellow industry players, VeriFone has virtually no mindshare among consumers, and this is the area that VeriFone will need to work on if it is to become relevant.
In this regard Talach sees an opportunity for widening out its scope without alienating anyone: “We don’t discriminate between Isis, PayPal or Visa or even retailers. We see ourselves as a commerce platform provider that is open to all technologies.”
Organic growth proving helpful
VeriFone is at least 5 years behind PayPal when it comes to the networking and infrastructure capable of handling large transactions across boundaries online and unsurprisingly the company has been busy acquiring pieces to bring its offerings up to scratch. In 2011 the company took its first step towards this by acquiring Global Bay, a company that allows retailers to use iPads as point of sale devices. This addition has helped the company to extend its offerings to retailers who want to process transactions via the iPod Touch and the iPad. The move is a bold one of course, and Talach believes VeriFone is on the right track.
The acquisition of Global Bay is just the beginning; according to Talach the company plans to spend more than $1 billion a year on acquisitions.
In the grand scheme of things VeriFone decision to broaden its focus is a good thing for consumers and merchants—especially small scale merchants. Presently PayPal dominates a large chunk of the online payments sector, and even though its fees are smaller compared to other payment providers, dealing with the company can be a major pain. Provided VeriFone can bring some freshness to a narrow and dull set of players in the space, merchants especially should be able to inject flexibility into their businesses.
Perhaps too, VeriFone’s forte in handling the hardware side of transactions management is in the end its biggest strength. Now all the company has to do is make a name for itself online.