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Education

StreetSmarts SM

“Starting in the Street

and ending at the

Merchant’s front door”
Steve Norell
When it's time to say goodbye

By Steve Norell what the salesperson is saying – except when they
US Merchant Services Inc. are told how much it's going to cost.
4. The merchant asks such questions as whether the
oday's POS is all together different than the POS system will do inventory or time and atten-
POS of 10, 20 or 30 years ago. It is a full blast, dance, what type of support they will receive, who
feature rich operating system that allows mer- trains them, and what it is going to cost.
T chants to run most of the important tasks for
their businesses, as well as provide sales, inventory, loy- Merchants usually picked the least expensive software.
alty programs reports and much more. And the real pain started after the install. Most POS sys-
tems are computer and server based, and all problems
In the mid to late '80s, most small and midsize (SMB) would surface at merchant locations. For merchants this
merchants viewed a POS system as an overpriced piece of meant another bill from the VAR to drive to the location,
hardware they didn't need. They bought a cash register at fix the problem and, if necessary, replace the hardware.
Office Club, and away they went. As tabletop credit card
terminals improved, merchants plugged them in, placed When it came to the credit card piece, the VAR would ei-
them next to their cash registers, and they were good as ther refer a merchant level salesperson (MLS) or tell the
gold for the next decade or more. merchant to find one himself. Since Internet Protocol was
not really a big thing in those days, the VAR did not even
The evolution of POS system sales
think about making money from credit card processing.
However, much larger merchants, especially decent- For VARs, it was sell the hardware and software and,
sized restaurants, needed full-featured POS systems. The hopefully, get a support contract. Usually, VARs were us-
problem was that they were not cheap. A merchant would ing money from the next sale to pay for completion of the
spend thousands of dollars upfront and most likely incur last sale. I believe more SMB merchants did not purchase
continuing expenses until the business ceased to exist. POS systems because of all the reasons I stated above.
The only place where merchants could purchase POS
systems was from value-added resellers (VARs). The MLS provided the processing, and the VAR provided
the POS. This was perfect for the MLS and not so good for
The sales cycle went something like this: the VAR, since the VAR made nothing from the process-
ing, and hoped for occasional referrals from the MLS.
1. Merchant is opening a new business and wants to
purchase a POS system. Putting POS before processing
2. Merchant calls several POS companies by way of Jump forward to 2001 when Mercury Payment Systems in-
referral or looks up names he or she has heard men- troduced a new ISO/VAR partnership model. This would
tioned. not mean much for most MLSs, except that the VAR was
3. Several POS VARs do presentations claiming their now competing to take business from them. And the VAR
software is the best money can buy. Most merchants was receiving free integration for software it sold, basical-
understand neither what they are looking at nor ly locking out the competition. MLSs that really wanted to
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