First Data Corp. has teamed up with Microsoft Corp. and Hewlett-Packard Co. to create a more comprehensive point of sale terminal aimed at small merchants.
The terminal, First Data POS Value Exchange, can accept just about any type of payment and provides merchants with Microsoft’s account management, inventory tracking, and customer relationship software.
This will give small merchants “technology horsepower in their store at the point of sale just like the major merchants have,” Barry McCarthy, the president of product innovation at First Data’s commercial services unit, said in an interview Tuesday.
The machines can accept checks, gift cards, credit cards, and both PIN and signature debit. Small merchants often need several devices at their checkout counters to accept so many types of payments. First Data and its two collaborators have been testing the terminal since summer 2006 and are now making it widely available.
Mr. McCarthy said that the terminal will help merchants “sell more to their existing customer, and operate more efficiently,” with the aid of the payments, inventory, and customer relationship management software.
First Data will provide the payment processing capability and connections to the payments networks, while Hewlett-Packard will provide the hardware.
Microsoft, which already offers a wide variety of software tools for small merchants, will handle the software. Microsoft released a new version of its Dynamics Point of Sale software Monday.
James Watkins, the director of Microsoft’s Dynamics U.S. Retail, said that over the years, “top retailers all have had a “tremendous amount of attention paid to them by our industry. The smallest guys not so much. So now, for the first time, you’ve got First Data, HP, and Microsoft really focused on these guys with a laser beam, and it’s going to be very good for these retailers.”
Besides handling payments, the terminals will give merchants a better understanding of which products are selling and how often, Mr. Watkins said. Merchants can use this data to make purchase orders and manage their customer relationships.
“They also have the ability to do very targeted customer marketing” and to “monitor purchase history on their customers,” Mr. Watkins said.
Leon Majors, the president of ESP Payments Research, a division of Phoenix Marketing International of Rhinebeck, N.Y., said terminals that can accept many types of payments have been available for some time but were generally too expensive for small merchants.
Making the bookkeeping and inventory management capabilities available could be appealing to small merchants, Mr. Majors said, but one lingering question is whether merchants will “want to do the back-end stuff to make it work properly.”
Edward Neumann, the managing director of the banking practice for CC Pace, a consulting company in Fairfax, Va., said this partnership is “tapping into a relatively underserved market.”
The terminals are “inexpensive enough so that merchants will readily accept them,” he said.
This “could be a big deal for increasing merchant acceptance of all cards, but more importantly PIN debit cards at small merchants.”
