Apriva Builds Vending Payment, Data Toolbox On Secure Base

Posted On: 10/8/2018

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David Riddiford
"We look at vending from two perspectives," said David Riddiford, president of Apriva. "On the wide view, it's a business that applies payment systems and related technology to self-service retailing. At a macro level, we believe it's time to think about how the industry can change and expand over the next few years. There are opportunities to-day for taking the unattended point of sale to a higher level."

The first step in benefiting from the present situation is to grasp the significance of ubiquitous "cloud" computing. "This gives operators access to incredibly powerful computing resources without making a major investment in hardware and database development," he pointed out. Increasingly, this infrastructure is taking the form of online services to which retailers can subscribe. It is no longer necessary to buy into a comprehensive system and change all of an operation's procedures to conform to its requirements.

Riddiford explained that the established turnkey-package approach still can make sense for some operators, but alternatives available today can offer greater flexibility and control over costs.

Whichever course a vending company chooses to follow, he said, it's important to keep an eye on the continuing evolution of communications technology. As 4G wire-less supplants 3G and mobile payment methods proliferate, the increases in speed and flexibility are creating an entirely new retail environment in which it's relatively easy to turn existing real estate into a plat-form for self-service shopping. Vending operators are experts at self-service, and their familiarity with unattended points of sale should give them a head start in the emerging new world.

"There are concerns," the Apriva president continued. "It's a two-sided coin. On one side, the operator now has the ability to harness big-data analytics to define and meet clients' demonstrated needs, and to compare results with those of other businesses. On the flip side, that will require an enterprise moving out of the old world to become proficient at collecting data while dealing with the questions that data collection raises: questions about security, privacy and regulatory compliance. This is important."

Riddiford recalled that Apriva comes from a background in secure data communications. The company has two divisions, and the older one pioneered the development of defenses to protect information sent from mobile devices; the U.S. government is a major customer. With that background, Apriva does not regard the ability to assure strong security in transaction processing as an astonishing new competency.

"Yes, we have Payment Card Industry validation," he told VT. "It's important, but it's not enough. We don't 'do security' as part of our service offering; we make our living from it. Security informs the way we are."

Apriva's products for vending and other unattended retail businesses therefore weave security into "layer one, the table stakes," Riddiford said. "This is the foundation; it's very important. We offer high security – as well as high uptime and high reliability."

"We know that unattended sales are fundamentally different from other retail models. You need to know, for example, that a machine is able to make a sale."

The company's value proposition, at base, is the offer to provide services that will keep the operator in business, at an affordable price.

The next layer is where Apriva sees its competitive strength. "More and more operators understand the value of cashless payment capability," Riddiford observed. "And it's now possible for them to feel comfortable about choosing their service providers on an à la carte basis. This allows them to start buying wholesale: shop around for the components, and use a gate-way to unite them. We think this is the direction the industry is going.

"The gateway is our point of differentiation," he explained. "It's truly 'agnostic' – we don't get money from acquirers or hardware manufacturers; just from our customers. So we can serve as the honest broker. We work with all of them; some are better for some businesses, and some for others."

Apriva's operator customers can benefit from the company's familiarity with the cashless payment and data communications landscape, Riddiford said. "We can help operators move to the next level with the right hardware and the right transaction processor, all highly secure."

Apriva's long and deep involvement in wireless communications also can be useful to operators in choosing suppliers, he continued. "Mobile network carriers will be turning down their 3G service in the near future," Riddiford predicted. "We see 4G lasting for another decade or more; it offers plenty of band-width for what we need now. We advise operators to use 4G devices.

"The 5G technology that's on the horizon promises greater bandwidth and lower latency, which will help unattended points of sale to deliver much more powerful functionality," he added. Thus, choosing products that are readily upgraded is the best strategy.

"And get ready for EMV payments," he continued. While major credit cards have added EMV-compliant chips, and today's merchant terminals generally accommodate them, the benefits of EMV in vending have not been apparent, and the industry has been slow to adopt it.

Riddiford sees self-service gas stations as the catalyst of change. They'll move to EMV and, by doing so, will drive up the costs of magnetic-stripe technology.

"Our advice is to install EMV-capable equipment, so you can update it over the air," Riddiford said. He believes that the great shift will be under way by 2020, and the last operators using magnetic-stripe readers will have a difficult time. "Within 10 years, magstripe transactions likely won't exist," he predicted. "And nobody wants to buy hardware twice."

Moving away from "swipe" cards also will eliminate the threat of "skimming" devices stealthily inserted by thieves into card readers. This is a benefit of great in-terest to service stations – and automated teller machine operators.

American consumers have been slower to adopt mobile "wallets" than some had predicted, Riddiford said, but their popularity is growing rapidly. He identifies two sorts: the "horizontal wallet" like Apple Pay, tied to a major card and thus useful for making purchases from any retailer able to read them; and the "vertical" kind, typically a store card (Starbucks and Dunkin' Donuts have popular ones). The "vertical" wallet has obvious application in the micromarket sector. "At some point in the future, most of what we do will be done with mobile wallets," he predicted.

Vending, unlike most retail businesses, has long been defined by the technology upon which it has relied to do business. Today, operators have the ability to adapt that technology to do business the way they wish to do it. Apriva can provide ex-pert assistance in making the adaptation.