New PayPal Zettle Terminal Shakes Up and Wakes Up US Mobile POS Space

In a move well-timed for the resurgence of physical retail ahead of holiday foot traffic, PayPal is bringing its PayPal Zettle Terminal mobile POS solution — ‘Terminal’ for short — to U.S. retailers with a set of features to make it an attractive checkout tool for SMBs especially.

In the Tuesday (Oct. 11) announcement, PayPal said, “the in-store solution comes with the Zettle point of sale app pre-installed, and small businesses will get an integrated solution that not only helps them accept a range of fast and secure payments in-person — including credit cards, contactless, digital wallets and PayPal and Venmo QR Codes — but also helps them manage sales, inventory, reporting and payments, all in one place.”

Discussing the development with PYMNTS’ Karen Webster, Ed Hallett, senior director, SMB Solutions at PayPal called the form factor of the all-in-one mobile point of sale Apple-inspired, saying it’s “kind of a milestone in the hardware to manage in-person payment interactions.”

Webster observed that the new POS incorporates more of the “brains” of retail ops beyond payment acceptance, and Hallett agreed, noting that Terminal “gives you that ability to manage the core point of sale workflows with a product catalog, a shopping basket, customer receipt generation and so on” in handheld fashion.

“The seller is free to complete the entire checkout process, from start to finish, wherever the customer is — on the shop floor, by the table, on the terrace, at the point of delivery or anywhere where there’s mobile coverage,” per the announcement. “Terminal can also include an integrated barcode scanner and can be attached to a dock that has a built-in printer for on-the-spot receipt printing.”

With a nod to mobile POS competitors like Square and Shopify, Hallett said “There are a few of these on the market, but there are some things about this which are a little bit different. It’s modular, so you can buy Terminal as a stand-alone device if you don’t want the portable receipt printer and dock. You can buy the thing on its own, which means it’s cheaper.”

A Terminal, without accessories like a receipt printer, is $199.

Further differentiating Terminal is its preloaded 4G SIM card enabling the device to work in the absence of in-store Wi-Fi, which Hallett called a useful “fallback” for SMBs enabling them to process sales digitally using regular carrier service when store Wi-Fi is down or unavailable.

See also: PayPal Launches Zettle Terminal in the UK

A Model of Efficiency

Showing an awareness of consumer and retail struggles in the current inflationary environment, PayPal Zettle Terminal leverages the power of the PayPal ecosystem to control fees.

Hallett told Webster, “the processing rate’s very cheap. We charge 2.29% plus 9 cents to process card payments with this device. The funds settle almost immediately into your PayPal wallet. Those two things together are quite strong, plus the cheap device itself and how powerful it is.”

“Obviously, settling into the PayPal wallet means that if you’re also someone who’s transacted online, I have one place where my money goes so I can manage that all through one account,” he said. That affords PayPal merchants a single view of the customer that SMBs and other merchants have, which can inform working capital underwriting and other higher functions.

“There’s obviously a barcode scanner which helps move things along faster. It’s got that mobility and key busting capability where again, modularity is something that we’re excited about. Some merchants already using it are quite happy with it. The mobile connectivity is really a big thing.”

See also: PayPal, Venmo Now Payment Options at In-Store POS

Taking Pain Out of MPOS

With the needs of small and medium retail businesses clearly in mind, Terminal’s design and ease of integration is poised to potentially replace a generation of legacy POS systems.

Hallett said “you have people who may have a sort of legacy chip and pin terminal, which you could say is a bit ‘dumb’ in that it doesn’t allow you to build a shopping cart and track your sales as well as your payments. It doesn’t give you that integrated point of sale and payment experience.”

Terminal addresses that pain point, as well as the checkout countertop clutter, as he said SMBs currently using iPad and tablet-based POS, the smaller Terminal device “reduced space is a value add versus having an iPad and a store kit and cash drawer and all of that kind of stuff,” he said, adding that “for each of those demographics there can be an upgrade.”

If the retailer using a tablet-based POS already has a Zettle account, replacing that with Terminal is as simple as logging a new device into the existing account with no other changes. However, while Hallett said that process takes about five minutes, some SMBs (non-Zettle users) will need to rebuild their product libraries and take their photos again. “So, you’ll have some setup elements.”

Positioning Terminal as a smarter mobile POS, Hallett said, “merchants are asking for that because it speaks to really basic elements of running a business. If I only know that I’ve taken a bunch of payments and I don’t know what products I’ve sold, then it’s really hard for me to make basic decisions about what do I need to sell more of.”

“One of the things that we offer is input cost so you can start calculating your gross margin, so you can understand like, ‘I’ve sold 10 of these things, that’s my most popular product’ for starters, working out what I’m selling the most of before even getting into inventory management. Then I see where I’m making my margin so I can make good business decisions about what I sell.”

He added that Terminal offers “best in class” integration with eCommerce platforms like Big Commerce, among others, noting that Terminal makes it easier to sync inventory helping avoid out-of-stock frustrations. “These are real business problems. We’re not in too much of an innovation space yet. It’s just meeting very basic operating needs [where] the SMBs have been underserved.”