Hypercom Corp. on Jan. 6 announced its Optimum L4150 point-of-sale terminal can send consumers digital receipts to their e-mail addresses, an option the terminal maker says could save merchants in terminal printer and ink costs.
The Scottsdale, Ariz.-based company also announced a contract renewal with Philippe Tartavull, president and CEO, through 2012.
The L4150 terminal uses software from TransactionTree Inc. that merchants can use to capture a consumer’s e-mail address, Hypercom says. Upon completion of a transaction, the merchant asks the customer if he would prefer a digital receipt via e-mail or one printed out, regardless of the transaction type.
Hypercom would not disclose how many L4150 terminals are deployed but says it “is our most popular terminal for multilane retailers.” The terminal has been available since 2007, and a software upgrade can enable the TransactionTree service on devices already in use, Hypercom says.
No legal difference exists between a printed receipt and a digital version, Atlanta-based TransactionTree says. Consumers also will have access to an account they set up on TransactionTree’s site to view their e-mailed receipts.
“The transaction will still be valid and will allow the consumer a much easier way to track their expenses in a centralized location rather than looking for a receipt that fades quickly,” says Vanessa Jimenez, TransactionTree chief creative officer.
As for whether merchants will use the service, Jimenez says a recent study by trade publication Retail Info Systems News found that 12% of retailers already provide digital receipts with another 18% expected to do so in 2010.
The service’s success on the Hypercom devices ultimately will be determined by merchant adoption, and many merchants will examine the value digital receipts offer, suggests Gil Luria, vice president of research at Wedbush Securities, a Los Angeles-based investment research firm.
“It’s very hard to predict how successful a product like that is going to be when it’s first introduced into a market,” Luria says. “It appears to be totally compelling.”
But he issued a caveat that such technology advances still rely on consumers. “Sometimes cool technology doesn’t get received well by consumers,” Luria says.
One might expect this type of service from payment-terminal makers in saturated markets, Luria says. “Innovations in payment terminals are what drives upgrades in equipment,” he says.
Indeed, the e-mail-enabled Hypercom terminal is emblematic of what to expect from payment-terminal makers in 2010, says analyst George Sutton of Minneapolis-based Craig-Hallum Capital Group LLC.
“This is another innovation that represents what we’re starting to see from terminal vendors this year, which is trying to move forward with some fairly significant changes in the way terminals play in the overall [payment] system,” Sutton says.
This Hypercom terminal represents one strategic direction for Hypercom, among many the company has undertaken during Tartavull’s sway as president and CEO of the company. Hypercom renewed the employment contract with Tartavull on Dec. 30, extending it through Dec. 31, 2012. Tartavull joined Hypercom in February 2007 as president and in December that year added CEO to his title.
Neither Sutton nor Luria are surprised that Hypercom renewed Tartavull’s contract.
“Much of the investment enthusiasm in regards to the stock has been driven by our comfort with his strategy,” Sutton says. “We will see a lot of those strategies unveiled this year in terms of how Hypercom manufactures products.”
In November, Hypercom announced it was developing a “joint development manufacturer” model. Under this model, the terminal company will design the devices, and the hardware manufacturer will choose the actual components used in them.
“They’re going to look like a marketing-and-design group that marries up with a builder,” Sutton says. It is similar to the model Apple Inc. uses for its products.
Tartavull’s influence also shows up in Hypercom’s financial results, Luria says.
“Hypercom has had a very hard time through several attempted turnarounds over the last several years,” Luria says. Financial results from 2009 appear to show “maybe this company has been able to turn it around and made some progress to being consistently profitable.”
Hypercom generated net income of $1.3 million for the second quarter of 2009 and $1.2 million in the third quarter last year, the company’s first profitable consecutive quarters since the third quarter of 2006, according to Hypercom.
“Let’s not forget they had two profitable quarters in the midst of the greatest recession in 70 years,” Luria adds.
Luria also credited Tartavull with the successful integration of the e-Transactions business Hypercom bought from France-based Thales SA in 2008.
