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premise of delivering innovative technology solutions to
The very point of sale partners. "We have always felt it is our fundamental obli-
gation to empower our sales partners with differentiated
and market disruptive solutions to win over and retain
premium customers," he said. "That is why in 2008, we
made substantial investments in hardware, software, sys-
tems and other integral areas in order to assemble the first
POS-as-a-service program."
Terminal wars revisited At the time, Isaacman described the subscription service

By Dale S. Laszig model as a point of differentiation for partners and a
key driver of organizational growth. Ten years later, he
DSL Direct LLC said the integrated payments journey continues to yield
positive results. He has seen merchant services become
erchant level salespeople (MLSs) had the more commoditized, making it imperative for MLSs and
ride of their lives in the heydays of terminal ISOs to offer more than just competitive prices. They must
selling. Never mind that many boxes became also solve problems and help merchants simplify and
M obsolete before merchants had finished pay- enhance the customer experience, he added.
ing for them. Quantity discounts and leasing programs
were putting food on the table through the eighties and Ancillary products, services
nineties. Despite early warnings from ISOs and manufac- When ISOs and MLSs could no longer bank on upfront
turers, who correctly predicted the bubble would burst, leasing profits and "future proof" equipment sales, they
many MLSs thought of countertop terminals as a kind of began to look for new ways to compete. "Think outside the
lifetime annuity and were surprised when virtual termi- box" and "so much more than terminals" became popular
nals and POS giveaways began to eat their lunch. expressions. Industry veterans saw friends struggle to
reinvent their jobs and business models; many left the
In 2004, Jared Isaacman, CEO at Shift4 Payments, then industry.
known as United Bank Card, issued the opening salvo
in the terminal wars with a free terminal program. ISOs and MLSs doubled down on ancillary products and
Isaacman said few early imitators understood the nuances services to replace lost terminal revenue. Gift card, loyalty
of bundling equipment with services. As a result, many and prepaid programs delivered recurring revenue
ISOs went out of business. Equipment margins also took streams. Mobile app marketplaces further expanded
a hit, prompting equipment manufacturers to explore value-added offerings, enabling merchants to selectively
outsourcing and off-shoring manufacturing facilities. incorporate apps and preconfigured vertical bundles
uniquely designed for their markets.
Isaacman told The Green Sheet he never intended the
program to be a pure hardware play; the objective was to The State of Application Development 2018, published by
offer a comprehensive, end-to-end platform. To that end, his OutSystems, found 66 percent of new apps are developed
company bundled signature capture, online reporting and for customers or business partners. "The world is changing
free terminals into its all-inclusive Interactive Merchant at breakneck speed, and the challenge for all businesses is
System. "We also had very specific models of the terminals to identify the threats and opportunities that will come
manufactured uniquely for what was United Bank Card from digital innovation and respond faster than their
at the time," he recalled. "Most of our competitors who competitors," researchers wrote. "Those that fail in this
launched similar programs about six months later really task risk hemorrhaging customers and revenue to more
were just offering a subsidized hardware solution." agile competitors, including new disruptors, that aren't
Curtains for one-size-fits-all weighed-down by complex architectures and legacy-debt."

In the ensuing years, customized, integrated POS solutions Single-access, diverse ecosystems
gradually replaced uniform countertop terminals. The payments ecosystem is a complex patchwork of com-
For established and newer merchant verticals, device peting offerings, Isaacman noted. Closed, proprietary sys-
manufacturers integrated customer-facing PIN pads with tems are being replaced by open-source, interoperable sys-
proprietary POS systems. Eventually, customer-facing tems that support an array of third-party apps. Merchants
systems found their way to small and midsize merchants, need knowledgeable guides who can help them adapt to
largely driven by browser-based terminals, mobile ever-changing technology, security and regulatory re-
payment solutions and low-cost tablet POS options. quirements. They need trusted partners with advanced
tools and foresight who can help keep their processing
Isaacman noted that through nearly 14 years and sever- systems efficient, compliant and up-to-date, while provid-
al re-brandings, Shift4 Payments maintained its original ing a single point of contact for support, he added.

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