SAN FRANCISCO–ISOs and agents no longer have to turn down business from merchants that also want point-of-sale systems with card-acceptance services, a presenter here at the Western States Acquirers Association Eighth Annual Conference told attendees Sept. 21.
ISOs, who used to make their living by selling or leasing standalone payment terminals, often shy away from offering POS systems because of the complications dealing with separate vendors for hardware, software and processing, said Bryan Daughtry, vice president of sales and marketing for Up Solution, a Hackensack, N.J.-based vendor that supplies all three.
A single-source company eliminates the “blame game” of separate suppliers passing responsibility to each other instead of solving problems, Daughtry said.
ISOs have an opportunity to sell POS equipment in the middle market, where systems typically retail for $3,000 to $3,500 but can go as high as $6,000, Daughtry said. Markups can bring ISOs $1,000 to $3,000 when they sell a system, plus subsequent monthly service contract fees, he noted.
“Churn” figures into the market, too, because POS systems tend to last three to five years, creating a replacement market, said Daughtry.
ISOs still have time to enter the POS-system market before it matures, he said, adding that 20% annual sales growth is expected to continue until 2015.
Merchants are taking a keen interest in POS systems because their improved customer tracking is providing vital consumer information for marketing campaigns, said Daughtry. Retailers are hearing about those positive results from their peers, and they want to use the systems to take their own businesses to “the next level,” he said.
ISOs can overcome the objections of merchants who have had POS system problems by pointing to the improvements in newer offerings, Daughtry adds.
The time has come for ISOs and agent to put aside their own objections to selling POS systems because they view the equipment as “too complicated” or disqualify themselves by saying “I’m not computer-savvy,” said Daughtry.
Recent developments cast down on those fears, he said, noting the number of ISOs offering POS systems has tripled in the past two years. About one-third of ISOs now sell POS systems, he said.
Selling such systems enables ISOs and agents to enhance their reputations among merchants as payments experts, differentiate themselves from competitors and reduce merchant attrition because of the more comprehensive relationship it builds with retailers, Daughtry said.
ISOs entering the POS systems business might want to pick one or two types of retailers to target, with restaurants as a plentiful option, he noted.
And getting into the POS business achieves a kind of symmetry, according to Daughtry, because many ISOs started out by offering merchants hardware in the form of terminals.
