Page 23 - GS170201

Views

Transformative POS terminals He wanted to create a global

This all came to a head when, in 1981, the card associations "new person's network" that is less
(now card companies) offered discounts to merchants
if they would use the newly developed automated sexist, is more multicultural and
transaction technology for all credit card purchases greater includes a bonding college
than $50. The only problem was that early POS terminals
cost around $900. Just for perspective, $100 in 1980 is equal experience. The fellows would
to about $308 today. This was not going to work for most
merchants, to say nothing of the telecommunications costs provide continuity when
for multilane merchants.
institutions cannot.
Somebody had to figure out how to make an affordable
terminal and provide an affordable telecommunications
link so that the card industry could grow to what it is In 1984, Melton introduced the ZON credit card
today: 8 million merchant location-points. It is not an authorization system with a $125 price point, built on the
exaggeration to say that one person made that happen: miraculous Z80 chip. By 1988, Verifone had more than half
that person was Bill Melton and his company, Verifone. of the POS systems market, and then bought Icot Corp.,
the second in the market with a 20 percent market share.
Using his connections in the Far East, Melton figured By 1989, when Melton retired from the firm, it had shipped
out how to engineer and produce a terminal and get it to the first million ZON systems.
market in 1982 for $500, by lowering manufacturing and
operating costs. Melton got help from William Gorog, Melton was a founding investor in Transaction Network
founder of LexisNexis, who financed Verifone with letters Services Inc. and remained a director until it was sold to
of credit and introduced him to a venture capital firm for PSINet Inc. in 1999. Back in the 1970s it cost 60 cents and
additional financing. took 60 seconds to authorize transactions in the check
business. Telecommunications was one of the biggest cost