ecently, a rash of comments and speculation appeared on GS Online's MLS Forum about a mysterious Web site, www.bluewavepos.com, a business that sells refurbished and discounted VeriFone, Inc. point-of-sale terminals. Initially, two important questions arose on the Forum: Is the site, in fact, registered to VeriFone; and is it in competition with the ISO/MLS sales channel? The Green Sheet verified that the Web site was VeriFone's, and the company later confirmed it.

This topic is obviously something MLSs feel very strongly about. Forum members logged 113 posts on this matter, and this discussion thread was viewed more than 3,200 times. And based on what Forum members saw on the BlueWave POS Web site, many expressed confusion and anger in their posts:

The Web site "is a pretty major violation of principle, when we hear [VeriFone] tout that the ISO/MLS community is their backbone...," one person wrote.

Another wrote: "It's a premier manufacturer selling directly to our customers. It's hard enough to compete with other online distributors like Merchant Warehouse.com, etc. VeriFone has become one of the largest terminal manufacturers in the world by utilizing the ISO distribution model."

And another wrote, "As for my take on this, I think they owe an apology, not necessarily public, but behind the closed doors of the industry. Unlike the Forum, they cannot just go back and cover their tracks by erasing it all. They do need to react in a more professional method."

In response to the issue, VeriFone supplied the following statement to The Green Sheet on Aug. 18, 2004: "[Questions were recently raised] about VeriFone's relationship with BlueWave POS. To clarify, BlueWave was a pilot project designed to better understand the dynamics of the refurbished terminal marketplace. This project was a part of VeriFone's larger ongoing effort to understand market dynamics.

"The BlueWave POS moniker was utilized to ensure that VeriFone's brand would not influence the research results. The pilot involved VeriFone-owned, older generation, used equipment and was specifically intended to serve the ISO market. VeriFone anticipates our customers understand the need to periodically evaluate and understand the rapidly changing marketplace just as they do in theirs."

Following The Green Sheet's August 18 GS Online posting of a news story addressing the BlueWave POS Web site, many MLSs reported on the Forum that they called their VeriFone reps and received a personal apology. Also on August 18, VeriFone took www.bluewavepos.com "down for maintenance"; as we went to press, the site was still inaccessible.

Since the issue has come up again, The Green Sheet wants to remind its readers that selling POS terminals directly to merchants, and at a discount, is not something new happening in the industry. Merchants including Office Depot, OfficeMax and Costco offer POS terminals and transaction processing services to small businesses around the country ("Retail Outlets Challenge Sales Reps for Share of POS Market," The Green Sheet, April 14, 2003, issue 03:04:01).

The important thing to keep in mind is that although these types of retail chains offer POS products and services at a discount, by no means are they experts in payment processing. That is where you, ISOs and MLSs, can shine with your merchant customers, serving as consultants on bankcard processing and offering solutions for merchants to increase their business and improve their bottom line.