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The POS system buzz terminal will run them another few hundred dollars; a

back-office computer may cost $1,000; and accounting
By Dee Karawadra software will add another $300.
Impact PaySystem Before realizing it, merchants can easily spend over
$5,000 on equipment. So why wouldn't they be interested
Editor's Note: In this column, we're looking back to when POS sys- in an integrated solution that takes care of the payment
tems were new on the payments scene with an excerpt adapted processing, accounting, inventory, back-office operations,
from Impact PaySystem President and CEO Dee Karawadra's Street sales tracking, customer management and much more –
Smarts column published May 14, 2007, in issue 07:05:01. To read for less money?
SM
the full article, visit www.greensheet.com/emagazine.php?issue_
number=070501&story_id=83. Merchants get a one-stop shop for all their POS and back-
office needs. This creates value. And offering a product
omething has been generating buzz in the pay- that merchants value promotes loyalty. In addition,
ments industry. Many people who are talking the POS system has not saturated the small to midsize
haven't seen it; few have demoed it. Some merchant market.
S believe it is an elixir that will replenish the
income that equipment leases used to generate; others The profit potential
think it is beyond the pale for merchant level salespeople
(MLSs). From free equipment to zero transaction and statement
fees, margins are shrinking. This has created a price war
to the bottom. POS systems can bring back the hope of
So, what is the buzz about? The POS system. gaining margins by selling packaged value instead of
price. With the POS system, MLSs are essentially saving
POS systems have been around for a while. But now more the merchant time and money by providing a packaged
solutions are available for small to midsize merchants. solution.
Big names such as First Data Corp., HP and Microsoft
Corp. are teaming up to put together their version of a Offering POS systems also gives new MLSs an opportunity
POS system that will be distributed through First Data to earn a living while building a residual base. MLSs will
channels. Prominent ISOs like United Bank Card Inc. and also have better leasing options than those traditionally
Orion Payment Systems are also on the bandwagon. offered. Now MLSs will be able to offer financing through
The time is ripe companies such as General Electric Capital Corp.

One reason the POS system's time appears to have come is Zapping merchant attrition
that Microsoft is in the game. Most people with computers I speak to agents daily who express frustrations with
use Microsoft's Excel, Word and Outlook applications "free" equipment and cut-rate pricing on processing. This
routinely. Thus, Microsoft's Retail Management System type of competition forces MLSs to focus on lowering
software will be instantly familiar to them. merchant attrition. The POS system brings merit to the
sales process. No longer will MLSs sell the same widgets
Also, MLSs hope selling and leasing POS systems will competitors are giving away. Instead, they will be able to
reinvigorate revenue streams on equipment, which bring true value to merchants, providing a product that is
have been running dry due to the over-saturation of unique and not easily replaced.
free terminal programs. ISOs have been looking into
alternative revenue generators for MLSs. To survive the The temptation to switch processors to save a few pennies,
"freebies," we ISOs and MLSs have to find niches. POS once so easily done, will now come with repercussions,
systems open the door to one such niche. making a change in processors more thorny than rosy.
Merchants will think twice before deciding a new offer is
POS systems accommodate more than just payment worth the trouble. A transition could damage a merchant's
processing ‒ for a price comparable to what a wireless entire business system.
terminal used to cost. This has created an opportunity
for MLSs to provide an integrated solution for small to The POS system opportunity will have to overcome many
midsize merchants. What used to be cost prohibitive to hurdles before MLSs embrace it. The most important
them is now becoming very affordable. factors will be support, leasing options and a credible
retail solution.
Merchants spend from a few hundred dollars to a couple
thousand dollars for a cash register system. A credit card

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