Smart POS systems like PAX are vital to Merchant Service Providers – but are they secure?

The recent news that a US acquirer had raised concerns about PAX terminal security led a number of Merchant Service Providers’ (MSPs) to ask questions about their approach to next-generation payment terminals. With their business strategies on the line, some MSPs are asking whether smart POS systems really mean smart business after all.

In a new white paper, David Gudjonsson, CEO of pioneering payment security specialists Handpoint, explains why smart POS systems are vital to MSPs future business strategies – and why MSPs should have confidence in the security of PAX devices.

The smart advantage

In recent years, smart POS terminals have transformed the way merchants receive payments and power their businesses.

By moving from static, low-functionality traditional POS devices to smart terminals, MSPs are able to offer merchants intelligent, super-capable acceptance that combines payments with software for business intelligence, such as smart inventory, sales analytics, refunds and bill splitting.

These terminals can be updated over the air, meaning functionality can be added and removed easily, helping merchants to drive growth through new value-added services while saving time and money on administration, labour and hardware.

Smart POS terminals are proving so popular with merchants that MSPs have been building their future business strategies around them, and PAX terminals in particular.  Recent news reports may have led some MSPs to question this strategy.

However – as we show in our white paper – Handpoint’s in-house developers have created a unique solution that offers unrivalled speed, flexibility and, above all, security.

Handpoint: a unique solution

For tech buyers, security is paramount.  A recent survey from G2[1] found that security was either very important or important for 88% of tech buyers, making it their top-rated concern. MSPs need to evaluate their vendors on this key dimension.

The payments industry is a ripe target for hackers and fraudsters, with numerous high-profile breaches in the last decade.

“Using Handpoint’s native security features, MSPs and merchants can combine secure payments with customer insights from every transaction.”

In recent weeks, every major acquirer has engaged in a renewed evaluation of the security of their PAX solutions. Importantly, these reviews were not sparked by a security breach, but by the questions raised by a US acquirer.

An independent review by the US Department of Treasury found there is no outsized risk from PAX.

PAX shares that it regularly evaluates its compliance program to ensure it meets or exceeds industry standards for evolving issues such as cybersecurity.

Furthermore, they conduct stringent internal and external testing on PAX devices on a sampled basis, followed by a certification process that ensures payment data is firewalled and securely transmitted only to the intended recipients.

“PAX Technology’s highest priority, as always, is to ensure the safety and security of our systems, products, and services for our customers.” PAX statement

Smart POS terminals do so much more than payments, with functionality like geolocation and rich applications powering point of sale software, loyalty solutions, and more.  Many of these applications connect to the cloud.

This cloud connectivity is valuable to merchants, as it enables them to see rich data both on their terminals and in an online portal. These services and applications are subject to their own security review.

Segregating payments data from these connected applications provides vital protection for merchants and cardholders.  Our payment platform powers PAX smart POS terminals with an internally-developed P2PE payment application that’s completely independent of PAX Broadpos, PAX Positive or third-party payment software packages.

This application encrypts and controls all payment data flows, while facilitating customisable tokenisation schemes. This means MSPs and merchants can combine secure payments with customer insights from every transaction.

What’s more, our semi-integrated APIs enable apps to take advantage of Handpoint’s security protocols and stay out of sensitive data flows, whether these are being run on the PAX Android terminal or in the cloud.

Our new white paper outlines the many benefits of smart POS systems, and why we believe they are essential to MSPs’ future business strategies.

Europe’s overall POS estate is set to grow 30% in the next five years – and seizing this growth opportunity is going to mean delivering super-capable, lightweight and secure payments to merchants.

If successful, MSPs can end the long-standing challenge of merchants switching their acquiring relationship every year in search of ever-lower fees by creating merchant loyalty to their solution.

Handpoint’s unique payments platform offers MSPs the opportunity to exceed merchants’ growing expectations with a secure, flexible and super-capable smart POS terminal.

To learn more about Handpoint’s unique, secure payments platform for PAX Android terminals, download our white paper here

[1] See https://learn.g2.com/hubfs/G2%20%7C%20Buyer%20Behavior%20Report.pdf

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