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What’s the Future of Point of Sale? A Swiss Army Knife for Payments


October.30.2014 0 Comments

pos-terminal-googleAs Apple Pay pushes payment boundaries, a new terminal could change the mobile commerce experience for merchants.
It’s not often you get to sit down with entrepreneurs when they lift the curtain on a startup, especially people of Osama Bedier’s caliber.

Bedier, who oversaw engineering for the merchant-facing piece of PayPal’s business during that company’s early days, swung by Inc.’s offices last week to talk about his latest venture Poynt. He also demonstrated its main product, which has been in development since 2013, the Poynt Smart Terminal, which he says will help revolutionize the payments space as merchants gear up to accept more mobile payments.

“In stores today the payment technology is just a glorified calculator,” says Bedier, who can add to his list of credits, serving as the lead developer of the Google Wallet.

The Poynt device, which is a new payments operating system wrapped in a stylish terminal created by the designers of the Nest thermostat, hopes to remedy one of the top pain points of the mobile payment world, namely how fragmented it is. Bedier’s terminal encompasses multiple technology standards including nearfield communication (or NFC), which Apple has helped popularize with its iPhone 6. But it also functions as a business management tool.

“It is your helpful companion, looking at how you understand your business and providing helpful hints,” Bedier says.

Bedier, who says he’s learned firsthand from the disappointments of Google’s foray into digital payments and by watching the nascent successes of Apple Pay, hopes the timing is right for what he has to offer. That’s especially the case, he says, because starting October, 2015, merchants who accept credit cards will be required to swap their terminals. To accomodate a new technology standard called chip and PIN, about 16 million terminals in the U.S. will need to be replaced. (Those who don’t will be on the hook for any fraud costs associated with their credit card sales.)

Essentially, chip ad PIN (also known as as EMV, which is short for Europay, Mastercard, and Visa) replaces the older, less secure magnetic stripe with a card that contains a security chip, and requires consumers to enter a corresponding PIN code for transactions.

The Right Place at the Right Time

Bedier plans to capture this wave of change, by getting merchants to switch to Poynt. His terminal not only accepts new chip and pin cards, but NFC payments such as those used by Apple Pay, and even has a QR code reader to accommodate payments such as those enabled by Levelup.

Since it’s a wireless device, it can also move around store locations, and can even accommodate nascent Beacon technology, which alerts store personnel to specifics about shoppers, such as that they’ve come to pick up items in-store.

“You have to ride a wave that is already causing change,” Bedier says. “Apple Pay learned that.”

Andy Schmidt, research director at CEB TowerGroup, agrees that the company’s prospects are promising. Such an all-in-one machine could save small merchants the headache of continuous upgrades, among other things. “A Swiss-army knife…payment solution like Poynt could give merchants the flexibility to accept the payment types and approaches they are most interested in without creating a great deal of clutter or added expense,” Schmidt says.

More importantly, the terminal, which runs on a tweaked version of the Android operating system and which has 19 pending patents associated with it, Bedier says, gives merchants access to a suite of business management tools that the entrenched terminal makers don’t offer. (It also has state of the art security features, including two processors, one of which encrypts all transaction data on the machine and in-transit to the bank.)

To offer these applications, Poynt has partnered with startups and some entrenched players, including Vend, Kabbage, Swarm, Boomtown, Bigcommerce and Intuit. Among the tools small business owners can access through the terminal are customer and staffing analytics, inventory control, and real time cash flow financing.

On the Horizon

Still, not everyone is convinced. Some industry experts say Poynt will face heavy competition from the entrenched players, including Verifone and Hypercom.

“Just about every terminal manufacturer is offering multi-function terminals, incorporating NFC, magnetic stripe, chip and pin, and chip and signature,” says Thad Peterson, an analyst for Aite Group. They also offer software upgrades that allow the terminals to handle QR codes, he says.

Nevertheless, starting early next year, Bedier says Poynt will begin distributing terminals through two of the five top merchant banks. (He didn’t name them.) And at a price point of $300, it’s certainly competitive with other payment terminals, experts say.

Bedier plans to include many more payment applications, including advertising, payroll and loyalty programs going forward. All of that should play well to any small business owner that uses a point of sale terminal, and even ones who don’t.

“Walmart has an anlaytics group with a lot of manpower telling it what to do to improve,” Bedier says. “The small guy is kind of left out of that, but this technology can fill the gap.”