Why can't smartphones be used directly as POS terminals?

3 points by ihavequestions 6 years ago | 8 comments

Hi HN! I'm interested in this space, and my google fu is failing to penetrate into this particular bubble.

I'd like to know about standards regarding the workings of payments at all levels of the technology stack, down to the hardware. Any links are welcome.

This has come about through reading the Stripe Terminal product page. It has always struck me as rather odd and redundant that an external POS terminal is mandatory when phones have NFC chips in them. I'm clearly missing something, and would like to know what that is. I guess that the phone's NFC chips lack something?

I understand how Google/Apple pay works, but I'd like to know why I can't set an amount to charge directly on my phone, pass it to a customer, and have them tap their credit/debit card on my phone.

Slightly different scenario, but also wondering why I have to interact with a POS terminal in-store at all, when there is the option of an online payment directly on my phone. I guess this is more of a UX nightmare rather than a constraint of technology, but would love to have this confirmed.

Thanks!

detaro 6 years ago |

Security requirements, credit card companies wouldn't accept a random phone as a terminal.

ihavequestions 6 years ago | |

I see, thanks for your reply. So it's a certification issue rather than a technological one - makes sense!

detaro 6 years ago | | |

It is a technological issue in the sense that certification has technical requirements a smartphone can't meet.

tdeck 6 years ago |

One reason is that traditionally any device that accepts PINs for payment cards needs to meet special tamper-proofing requirements. This was a big challenge that Square was working on when I worked there. Here's a thread on SO about it: https://security.stackexchange.com/questions/159118/how-does...

ihavequestions 6 years ago | |

Thanks for the info!

_8j50 6 years ago |

What if I don't have a smartphone or don't or can't install the app to make direct payment? I personally would not use online payment if I am in store. Privacy concerns aside,inserting a card is easier for me compared to unlocking my phone,opening an app and doing whatever is needed to confirm the price abd approve payment. That said,I am sure there are a lot of people that wouldn't mind who have "nothing to hide" and find physical cards inconvenient. This is already being done in east Asian countries.

You will still need a card reader in the US unless you wanna go all dystopian like China by forcing everyone to use an app which will be tied to your phone number and other accounts.

I would however challenge you to do this in a privacy conserving way, if you can get around anti-money laundering laws. The last thing I need is yet another app and company tracking my purchase history and promising they don't share it with a third party while sharing processed versions of it. Ymmv.

hesarenu 6 years ago |

Kinda like UPI? You scan merchant account no and pay directly from your account

ihavequestions 6 years ago | |

Not quite the workflow I was describing but it's interesting that UPI is a thing (in India).