Best Buy Co. Inc.’s first store in Turkey will use a shared point-of-sale service, eliminating the multiple POS terminals commonly seen domestically on merchant countertops, according to Ingenico S.A., which is supplying the service.
Unlike in the U.S., each bankcard issuer in Turkey has its own POS terminal, often resulting in merchants having as many as six devices on their countertops. Ingenico says its shared POS system enables retailers to use one terminal to accept multiple isuers’ cards.
Best Buy, which opened its store in Izmir last year, is using Ingenico terminals and PIN pads and is contracting with the company to service the terminals, a move that counters the traditional Turkish practice of banks supplying the POS equipment and leasing it to merchants. Under the three-year contract with Ingenico, Best Buy Turkey will rent the equipment from Ingenico, which will develop the software to manage all of the bank applications and handle deployment issues.
Because Best Buy Turkey is renting the terminals from Ingenico, it can pay a lower fee to banks, Ingenico says. Turkish merchants, when leasing terminals from banks, pay transaction and monthly fees, Ingenico says. In Best Buy’s case, it only will pay a per-transaction fee, Ingenico says.
Best Buy Turkey will deploy 25 to 30 terminals in its store and in each additional store it may open, Ingenico says.
The reduction in countertop terminals may seem counterproductive for a terminal maker bent on selling terminals, but Ingenico says the potential for revenue from the shared POS service makes up for a reduction in terminal sales.
Ingenico says it started working on a shared POS system in Turkey in 2005, and the company claims to have 54% of the country’s POS terminal market and a 90% share of the shared POS system market.
