Small business merchants are now turning to tablets not only to accept various forms of payment, but also to help them manage their operations. mPOS hardware and software solutions have therefore become a top priority for these merchants as they seek to expand and succeed. Buzz Stryker, CEO of POS Portal, recently talked to MPD CEO Karen Webster to discuss what his company does to make the implementation of mPOS technology possible for SMBs across the U.S.
KW: Tell us what POS Portal does and what makes your company different.
BS: We provide hardware solutions to SMB merchants through the payments channel, and also provide the channel with CRM software. We ship about 10,000 terminals a month to U.S.-based small merchants through contracted and non-contracted relationships, which we think is about 10 percent of the market, or of the 100,000 payments terminals shipped monthly to SMBs. By SMBs we mean about 5 million 1-3 location stores or operations. We service the payments industry, providing the hardware that enables processing and store management and mPOS software to happen.
KW: Give us a sense of how the SMB market has changed over the last few years, especially with the introduction of some of the new devices, mPOS and others, that provide different capabilities for those merchants.
BS: mPOS has been a keen area of interest for us for the last two years. We’re engaged with all of the major ISVs out there, and emerging ISVs coming to market with tablet-based apps for store management. We look at the 100,000 terminals shipped a month, and to compare to that, we think there are about 5,000 mPOS store management system shipped into the U.S. per month, of the 100,000 shipped total. The uptake effect is happening – most of the studies that we see suggest that this will grow to about 40,000 mPOS’s per month. The industry must change with the times.
KW: How is the decision-making process now given the options that you describe, integrated tablets and some of the other mPOS devices available? Is it faster or slower?
BS: We’ve been talking to a lot of small merchants directly. Say you’ve got an installed base of mPOS in the market today of about 50,000 in the U.S. of the 5 million small merchants. If you look at studies out there, that number is projected to grow to 2 million. As we go store to store, we see tablets more often. Something like 2-5 percent of all consumers at a merchant location are SMB owners themselves and they’re seeing these tablets solutions running stores.
We’re finding most merchants want to learn to run their business on a tablet, and then find out what kind of hardware they should have on that tablet. This is a profound, hardware-forward shift from what the payments processing world has seen in the past, and different from what we would expect. Most merchants also understand the value of getting an email address on file at the point of sale using a tablet so that they can engage with them in the future.
KW: How do you reconcile the unknown hardware that might be coming down the road versus the lure of the app that is really what runs the business. How do you help merchants work through that aspect of the decision-making process?
BS: Most of us have come to recognize that our mobile devices are the gateway to a variety of alternatives for content. It seems like the merchants are saying that they want to get to a tablet first, and then have the flexibility now and in the future to select the best app that’s best suited to run their business.
KW: What are you hearing from the SMB market about the need to support EMV?
BS: I think merchants of all sizes, including SMBs, are seeing mass media breach updates and are concerned. There’s a consideration for having the right secure hardware solutions. They may not see a great use case for paying a lot more for this solution when customers don’t have chip cards. We’ve got a partnership a partnership with a company that’s coming out with EMV that’s also bringing PIN debit to mPOS, and that may be something that merchants care about if they see that perceive that it’s less expensive for them to accept. And the customer may perceive that since he or she is entering a PIN number, there’s a greater level of security around the transaction and the hard data.
KW: Let’s talk about merchants’ need to accept mobile payments with consumers, and supporting integrations with mobile wallets. Does that come up in conversation a lot when talking to merchants?
BS: I think we’re starting to see this particularly in the food and QSR segments. I was just standing in a line to order food this morning, had some time to kill, and went ahead and downloaded the app, and preordered my food. There’s going to be more uptake in the food market for consumers to preorder, walk in, and walk out with their pre-built sandwich or coffee. That capability is built into more and more mPOS apps, and there’s merchant interest in doing line-busting and getting customers to engage with them more frequently.
KW: How are small businesses going about the whole procurement process? Are there better ways for them to think about acquiring these devices and making decisions that are more streamlined?
BS: It’s important to keep in mind that a lot of these SMBs may not already be on integrated POS solutions. Going with an integrated store management solution suddenly creates an infrastructure that didn’t previously exist at their store. Acquisition can be complicated, and there are a lot of to-dos and responsibility that may bring store operations to a halt.
We’re working hard to address these challenges. From a procurement and servicing perspective, one-stop fulfillment of a solution for that merchant is being assisted through the item selection process by one of our partner sellers. For example, an ISO sales rep working with the merchant to help them select items that they’ll need for their configuration, addressing complexity that didn’t previously exist.
Merchants also may be concerned about the cost of entry – we provide a low monthly cost solution to reduce the cost barrier to enter into an mPOS environment. In addition, many SMBs merchants are consumers themselves, so they have high expectations about how they get the hardware they’ll need. POS Portal enables them to easily get that hardware through its purchase option, and can close the complete solution for that SMB in a single call.
CEO of POS Portal
Buzz Stryker has built his career in the Payments Industry and founded POS Portal in 2000. Prior to founding POS Portal, Buzz’s experience includes the role of Vice President, Business Development at AMS, LLC and Sales Representative at FRS, Inc. As the President and CEO of POS Portal, Buzz is responsible for providing strategic leadership for the company by working with the Board of Directors and the Executive Management Team to establish long-range goals, strategies, plans and policies. In addition to his strategic leadership at POS Portal, Buzz is an Advisory Board Member at Electronic Transactions Association.
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