Full business management, not just payment acceptance

Known throughout the payments industry for making transformative moves, such as being the first company to offer free credit card terminals in 2004, United Bank Card Inc. has taken another striking step. In January 2012, the company adopted a new moniker, Harbortouch, named after its signature Harbortouch POS system. It also moved headquarters from New Jersey to Pennsylvania, where its Harbortouch division was already situated.

Founded in 1999, the company, which is an industry powerhouse processing about $10 billion in transactions annually, is now coalescing around the Harbortouch POS system, said Harbortouch Chief Executive Officer Jared Isaacman. "The future of this organization is completely around [touch screen] point-of-sale," he said. "We don't think that five, 10 years from now merchants will have traditional credit card terminals. Those just run credit cards, while a touch point-of-sale runs an entire business and enables the POS provider to become the proven adviser due to the customization of the business procedures."

A new kind of POS

In addition to credit and debit card, check, and gift card acceptance, Harbortouch POS is designed to manage gift and loyalty programs, make and record reservations (customers can log onto the program and reserve tables online), tabulate revenues, calculate tip amounts, verify customer age, manage inventory, manage payroll, help keep tax records, and more.

Brian Jones, Harbortouch Executive Vice President, Sales & Marketing, agreed the impetus for the company's name change was the tremendous success of the free Harbortouch POS program. The company introduced the Harbortouch POS system in 2007, began offering free electronic cash registers in 2009 and began offering the Harbortouch POS system for free in January 2011.

"Our merchant accounts are more profitable because the type of accounts we're able to get in touch with tend to be higher-volume merchants, and the attrition goes to practically zero, creating a lucrative, stable residual stream," Jones said. "And you're no longer spending half your time trying to save accounts because someone else is offering a lower rate; you're getting out of the rate game." He added that Harbortouch placed over 7,000 touch-screen POS systems in 2011.

Isaacman said the fact that Harbortouch offers its system free of charge is the company's biggest differentiator, but the system's features also help it stand apart from other POS systems. "We build the systems, develop the software and then offer it free of charge," he said. "We're giving away systems worth several thousand dollars, and right now there is no competitor doing that."

Immediate and long-term benefits

Isaacman noted that it often takes time for new business initiatives to bear fruit, but merchants who switch to the Harbortouch POS system begin realizing benefits right away. "With this POS system, when you put it in a restaurant or retail store, the savings happen that day," he said. "A restaurant will seat more people in a night, and serve faster and more accurately than without it. ... Even where you're able to seat one or two more tables in a night, you're talking a huge revenue increase."

Isaacman said the POS system's long-run profitability for ISOs exceeds that of ordinary terminals because it appeals to big businesses and other high-level merchants that generate high sales volumes; it optimizes sales volumes by accelerating a company's operations and improving the customer turnover rate; and it improves merchant retention because businesses using it appreciate its value, and all of their operations are managed through the system.

"You get higher quality merchants because of what the system is designed to do, which is run an entire operation," Isaacman said. "You don't need it if you're a small company with one employee, but if you've got a large restaurant or retail store with 25 employees, you can't live without it. It's twice as profitable as a regular terminal, its longevity is considerably better, and the average volume is so much higher." Isaacman said revenues from Harbortouch POS systems represent about 35 percent of the company's total business, but he expects that to increase substantially because of the product's popularity and the company's prioritization of Harbortouch as its flagship offering.

"Do I think it will be 100 percent of our total sales next year? No, I don't," Isaacman said. "Some old dogs you can't teach new tricks, and we want to be able to handle 99 out of 100 deals that ISOs give us. ... But I do think it will be about 70 percent next year, and a year after that maybe 80 percent. The flea market merchants and other smaller, mom-and-pop merchants might never need it. But with mid-sized to big merchants, I think we're best positioned to get that side of the market."

With Harbortouch, busy restaurants and other businesses seeking maximum efficiency can serve customers more quickly, and often more accurately, using a system that automates all aspects of ordering, pricing and paying, Isaacman said.

Maximum proficiency

Jones noted that the Harbortouch POS system also streamlines the ordering process. "The system can handle various restaurant tasks such as splitting a bill, changing tables, combining orders, managing gratuity and taxes, or changing the price of an item," he said. He added that efficiency and accuracy are also enhanced by the Harbortouch Tableside, Lighthouse and Reservations features, which are offered free of charge with each POS system.

Harbortouch Tableside is an application for Apple Inc. iPads that allows restaurant servers to place orders right at the table via iPads. "The application mirrors the actual POS software, and servers can place the order on the iPad's screen instead of writing it by hand on a notepad," Isaacman said. "These orders are automatically entered into the system and sent to the kitchen."

Harbortouch Lighthouse enables managers to remotely operate the POS system. They can change prices and add items, as well as view sophisticated reports that detail total revenues over different periods, sales of specific items or timetables of employee work hours. "Our software allows access from the Internet, so any store owner can control their system remotely," Isaacman said. "You can log on anywhere, change the cost of buffalo wings, or make other changes or additions - whatever you want to do."

With Harbortouch Reservations, customers can make reservations online, and restaurants can manage all incoming reservations directly through the POS system. "Similar online reservation systems cost hundreds of dollars a month," Jones noted.

In addition, the system's loyalty app "allows customers to pay with their phone and unlock rewards," Isaacman said. He added that merchants can send alerts to customers about rewards and other advantages, and "they can set all sorts of different values and thresholds. It does everything."

Tailored, customized, supported

Harbortouch offers five versions of its POS system geared to hospitality businesses, retailers, convenience stores, quick service restaurants and delivery services. "Every industry has something unique about it," Isaacman said. "T-shirt stores don't have the same needs as a liquor store or bar. Each system is tailored to industry specifications."

For example, restaurants that use Harbortouch typically employ features for taking and recording reservations, tracking table availability, calculating ticket prices and tips, entering orders and sending orders from the dining room to the kitchen. For liquor stores, the system allows vendors to calculate the price of a single container - or two or three containers, for that matter - out of a six pack if a customer wishes to buy cans or bottles individually.

However, the five basic variations of Harbortouch aren't sold as-is; rather, the company individually tailors every order to meet the specific needs of each merchant. "Before we ever ship it, we go over all the features [with the merchant] in advance," Isaacman said. "The merchant approves it or asks for changes, and once we get the approval, we install it on site."

The system comes with a lifetime warranty, so if components break down or malfunction, they're replaced free of charge, Isaacman added. "If something breaks, it is replaced overnight, no questions asked," he said. "We want our merchants up and running at all times. Every day our merchant isn't processing, we're losing money on a pretty large investment: the free POS system."

In addition to innovative products, the company is distinguished by first-rate, in-house customer service available 24 hours a day, Isaacman said. "Most competitors will man the phones 9 to 5 and then [outsource their call help at night]," he said. "Many of our POS merchants work until 11, 12, 1 a.m., so we have 24/7 customer service in-house, and that's a huge difference-maker with our POS service."

Built on strength

Isaacman and his team believe the Harbortouch transition is a boon to the company's 3,500 contracted ISOs, who serve 110,000 merchants from all 50 U.S. states.

"We feel that this is in the best interest of all of our sales partners" because when they engage merchants as POS consultants offering a free POS solution, their pitch "is going to be far more effective than approaching a merchant with the traditional 'lower rates and fees' bank card sales pitch," he said. "ISOs are able to give everything away - which is a program no one else has - with an upfront chunk of money and a good residual program. Most important, merchants using this product aren't going to go anywhere else."

Isaacman also noted that the company's relationships with its sales partners will remain unchanged, that it will continue giving back to the community through charity poker games at regional acquirers meetings, as well as through other means. And he expects the company will remain poised to recognize and implement further groundbreaking opportunities down the road.

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