Hypercom Inc., the Phoenix-based point of sale terminal manufacturer, announced a product last week that it hopes will narrow the gap between it and market leader Verifone Inc.

The product, the T7P, combines a receipt printer with keyboard and two-line display screen in a compact package, with more memory and other features than other terminals in its price range, Hypercom said.

Card Establishment Services Inc., the merchant processor based in Melville, N.Y., ordered and has begun receiving 10,000 of the devices, which will be customized and marketed as the In-One.

Another 2,000 terminals are "in the queue," many of them to be exported, said Hypercom president and chief executive Al Irato.

Competing Products

Mr. Irato made a pointed comparison with Verifone's Tranz 330, 380, and 460 models: "These and other POS terminals from competing vendors primarily offer low price as their best selling point. However, they are limited in functionality and memory capacity and are unable to easily address complex merchant interface requirements or the need for easy expandability to debit."

The T7P is said to be ready for debit, credit, electronic draft capture, electronic benefits transfer, and virtually any other type of card transaction. Mr. Irato pointed out it also comes with a five-year warranty.

He conceded in an interview that Hypercom, whose share of the point of sale debit market is believed to be below 10% while Verifone has a majority share, has suffered from its premium-price, one-size-fits-all approach.

Hypercom, which had its start in Australia, tended to emphasize the speed and accuracy of its technology. That carries over to the T7P. Hypercom says response times will be under 10 seconds, which is said to be faster than Verifone's Tranz line.

Low-Price End of Market

"Now we can compete without sacrificing functionality, and we can challenge Verifone in the low-price end of the market, where they are strongest," Mr. Irato said.

In a purchase of 100 units, the T7P costs about $440 each. At 10,000 units, one costs $349. A standard terminal with separate printer can run about $600, Mr. Irato said, which discourages electronic transactions at some lower-volume merchant sites.

A key to the price break-through, he said, is the integration of a modular roll printer on the device.

"The printing mechanism snaps out and can be replaced in 10 seconds if necessary," Mr. Irato said. If a merchant is large enough, it can keep an inventory of spare printers for installation as needed. Or one can be overnight-shipped. A printer problem will not disable the authorization or draft capture function.

Paper Seen No Longer Feasible

David Barnes, a spokesman for Verifone in Redwood City, Calif., said the company does not respond directly to claims made by competitors. But he pointed out that on June 8 Verifone introduced the Tranz 460 and Omni 460 products for the small-merchant market. They include a receipt printer and are designed to appeal to retailers who may still be generating paper credit card drafts.

"The recent elimination of printed warning bulletins [by MasterCard and Visa] sends a strong message to U.S. merchants that paper is no longer a viable means of authorizing credit card transactions," said Roger Bertman, vice president and general manager of marketing in Verifone's network systems division.

Hypercom has Card Establishment Services, the No. 2 merchant processing organization, singing the T7P's praises. Referring to its version, In-One, CES said it is "the first integrated terminal and printer housed in one unit available at a price comparable to less functional terminals."

"The In-One terminal offers merchants access to the latest in Hypercom and CES technology for a very moderate cost," said John C. Elliott, the processing group's chairman and chief executive.

CES is making In-One available first to retail stores, and it will soon add the restaurant and lodging industries. The devices are tied into the processor's Cardnet system and have 23 programmed function keys for easy training and instructions.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.