Once the credit-card reader to beat, VeriFone is losing ground to its rivals
IF YOU pay with plastic at the checkout, chances are you’ve seen the logo of San Jose, California-based VeriFone Systems. You may soon see a Chinese one instead.
VeriFone, the largest maker of payment readers in the US and the second-largest in the world, is losing ground to rivals offering more mobile options or lower prices.
The company’s share of the global payment-terminal market fell to 13.7 per cent last year from 16.1 per cent in 2014, according to a new analysis from the Nilson Report, a newsletter that tracks the payment industry.
In the US, its share has eroded more slowly, to 39.4 per cent from 40.5 per cent, the report found.
The new findings mark the latest piece of bad news for a company struggling to pull out of a tailspin.
Waning demand for new chipcard terminals among small US businesses and devicecertification delays forced VeriFone to cut forecasts this year, sending shares plummeting 43 per cent and prompting takeover speculation from analysts and even its former chief executive.
The company, slow to embrace a shift to mobile devices, is now trying to boost sales with new products and services, like Carbon, a portable counter-top terminal designed for cafes, restaurants and retail shops that requires minimal space.
“VeriFone has got to get to a place where it’s doing much more with mobile and tablet devices, and then find out what the growth opportunities are beyond selling hardware,” David Robertson, publisher of the Nilson Report, said in an interview.
The new report highlights a troubling trend for the beleaguered company. Chinese manufacturers Fujian Newland Payment Technology Co. Ltd. and Pax Global Technology Ltd. are taking share of the payment-terminal market by leveraging relationships with local companies in Asia that supply card readers to businesses.
In Europe, North America and elsewhere, Fujian and Pax are undercutting both VeriFone and global leader Ingenico Group SA on price.
“We’re very confident in the role Verifone is going to play in the future of payments and commerce, and we continue to be more and more relevant everywhere and to everyone we serve,” VeriFone spokesman Andy Payment said in an email. — WP-Bloomberg