Verifone has decided to stop selling its SAIL mPOS system to micro-merchants directly and will instead use banks to channel the product to this demographic.
SAIL was launched in May of this year and is a device that transforms Smartphone’s and tablets into POS card terminals. It aimed to compete with other products on the market such as the Square card reader.
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In their fourth quarter conference call with investors VeriFone’s chief executive Doug Bergeron said that: "Our experience through 2012 with tens of thousands of these micro-merchants tells us that the standalone economics of micro-merchant acquiring is fundamentally unprofitable and destined to be a negative gross margin business.
Customer acquisition costs either through research engines or TV advertising cannot and will never justify the razor-thin margins produced by merchants with infrequent volume and extremely high attrition."
The fourth quarter results saw the company post net revenues of USD485m compared with USD489m in the previous quarter and USD411m this time last year.
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