Total System Services Inc. has started offering a combined point of sale and store management system in an attempt to increase its merchant processing volumes and loyalty among its acquiring unit's merchant customers.

The Columbus, Ga., card processor announced last week that TSYS Acquiring Solutions has begun to offer a bundle of hardware and software that provides inventory management and other functions to small and midsize merchants in addition to card acceptance.

Mike Meyyappan, the vice president of product management at TSYS Acquiring Solutions, said the Tempe, Ariz., unit plans to market the PC-based systems through the banks and independent sales organizations that already sell the unit's merchant processing services to retailers.

"For them it's a complete turnkey solution. TSYS has done the heavy lifting for them," Meyyappan said.

TSYS also is offering technology support to these merchants, including training on the systems and a call center, among other services, he said. "TSYS is a one-stop shop for them."

The goal is to strengthen the acquirers' relationships with the retailers, Meyyappan said.

"It increases their stickiness to their merchants," he said. "A merchant who purchases this solution is less likely to leave that acquirer. The acquirer becomes a trusted business adviser, not just a provider of card processing services."

TSYS is offering the package in two configurations, with flat-panel monitors from Hewlett-Packard Co., or Toshiba America Inc.'s ar-code scanners, magnetic card readers, cash drawers, keyboards and mice. Both packages also include TSYS card processing.

Peggy Olson, TSYS Acquiring's vice president of marketing, said the biggest difference between the "value bundle" and the "premium bundle" is in the software. Retailers can choose either Microsoft Corp.'s point of sale software or its more comprehensive Retail Management System, which links inventory, accounting, and time and attendance functions.

"There's an opportunity to make money on the equipment and software bundle," Olson said.

An acquirer buying a card acceptance terminal for $300 and sells it to a merchant for $350 stands to make significantly higher profit on the more sophisticated computerized systems, which are likely to cost $2,000 to $4,000, depending on the configuration.

"That gives a bigger margin, rather than a $50 profit window," she said, though merchants are more apt to lease the systems than buy them.

Microsoft has a long history with TSYS, Meyyappan said. The Redmond, Wash., software maker partnered in 2002 with the merchant processor Vital Processing Services LLC to develop the Retail Management System, Meyyappan said. (Vital was a joint venture between TSYS and Visa Inc.; TSYS bought out the card company's 50% stake in 2004.)

The Microsoft system also drives POS Value Exchange, which the Denver processor First Data Corp. introduced in January 2007 in conjunction with Microsoft and Hewlett-Packard.

Adil Moussa, an analyst at the research and advisory firm Aite Group LLC, said TSYS needed a more comprehensive offering to compete with First Data, a unit of Kohlberg Kravis Roberts & Co.

"They're trying to catch up, really," he said.

Especially in a difficult economic environment, acquirers need an edge, Moussa said.

"There is so much competition right now, you have to step it up and offer some services that others don't," he said. "Merchant acquiring alone is not enough. It doesn't cut it. You have to offer something more."