NCR Corp. is entering the fray to get payment-processing deals with micromerchants. The Duluth, Ga.-based point-of-sale technology company this week launched Ring Up by NCR Silver, a POS service specifically designed for merchants with less than $100,000 in annual revenue.
The service uses a magnetic stripe and EMV-compatible Bluetooth reader in conjunction with an iOS and Android app. The device is a white-labeled Ingenico Group Moby/3000, which the POS terminal maker launched a year ago.
Payment processing is handled by Worldpay. Merchants must set up an account with Worldpay. NCR is not using the payment facilitator model. “Because we’re not acting as a master merchant, all of the merchant’s data is their own,” Mark Critchett, NCR product management director, tells Digital Transactions News. “We, as NCR, aren’t using the merchant data to enrich our network. It is not shared across our network.”
Critchett says there are an estimated 30 million U.S. small businesses, and anywhere from one third to half of them may fit the Ring Up model.
Critchett says Worldpay already works with NCR’s Small Business Division and resells NCR Silver, the company’s iPad-based POS product. “Through that partnership we’re able to do some things and have a bit more control with the customer experience,” Critchett says.
That is one of the important distinctions of Ring Up in comparison to its competitors, he says. Another is pricing. Merchants pay 2.7% per transaction for swiped or dipped cards, which is slightly lower than Square Inc.’s 2.75% fee. The fee for keyed-in transactions is 3.5% plus 15 cents, the same as Square’s.
Merchants pay $39 per Ring Up POS-acceptance device and a $14 monthly service fee. Square does not charge a monthly fee for its basic account. Square’s cheapest chip card reader, which requires an audio jack, is $29. Its wireless reader, which also accepts contactless payments, is $49. Ring Up does not offer contactless acceptance. “We looked an enabling a contactless device, but in our research the penetration of contactless, at this point, is still very low,” Critchett says. “We didn’t feel it was necessary.”
NCR’s overall strategy with Ring Up is to provide a POS service for merchants that one day, perhaps, may have enough sales volume to warrant a move up to NCR Silver or that felt NCR Silver wasn’t appropriate for them. “It’s a segment of the market that our traditional NRC Silver was not attracting,” Critchett says. “We want to have a product portfolio that meets the needs of all business sizes.”
Though seemingly scores of POS providers already court micromerchants, the segment remains a desirable group. “Micromerchants are a good segment of the population where margins are still high because those merchants don’t usually have bargaining power,” says Adil Moussa, principal at AdilConsulting, an Omaha, Neb.-based consultancy.
NCR’s software means smaller merchants can take advantage of capabilities that were not available to them before “and justifies the higher margins ISOs and acquirers are able to get from micromerchants,” he says.