VeriFone Systems Inc (NYSE:PAY) – getting very competitive
VeriFone Systems Inc (NYSE:PAY) tripped on its 2013 Q2 projections and recorded a loss. The company that makes card-payment systems recorded weakening product sales and increased legal expense. PAY sock crashed 20.87% and closed at $17.37 per share in Thursday’s closing. Its Q3 guidance now stands below average analyst estimate projections. VeriFone has been reeling from curbed debit and credit-card terminal sales in Canada, Europe and Brazil. These terminals are used at gas stations, retail stores and taxicabs. There has also been a cancellation in a distribution arrangement from the Middle East. New comers such as Square Inc., Groupon, PayPal, and Bank of America Corp, have led to a dipping PAY share in numerous markets.
Many of these rival companies have introduced software iterations that are supported on tablets and smartphones and changing the concept of payments via hardware terminals. Though a paradigm shift still has to come, VeriFone has not been a laggard and has been cutting its own deals as well. The latest is its deal with a payments startup, CardSpring. It will allow literally thousands of merchants to launch point-of-sale discounts, loyalty programs and other offers and customers will be able to use existing credit and debit cards.
How the system works
With this partnership it will be possible for retailers as well as third-party developers, such as Foursquare to build card-linked services for various VeriFone devices and point-of-sale systems. These applications will be triggered by the actual payment event and will not affect the shoppers’ existing purchase-experience or the store’s current hardware-setup, in any way. This is also an effort on part of PAY to make implementation simpler for merchants and relieving them from having to deal with any technical complexities.
Customers, on the other hand, will be rewarded for using Verifone systems and will keep heading to the same merchants and increase customer loyalty. There is absolutely no doubt about the fact that this upgrade will help VeriFone Systems Inc (NYSE:PAY) compete more effectively with new entrants such as Foursquare. If everything goes as planned, it seems to be a win-win situation for everyone concerned.