First Data Hopes New Box Will Help It Plug Into Smaller Merchants

Beyond a recent press release, First Data Corp. hasn't made a huge public splash about its new payment terminal, the FD-100. Yet the terminal is not just a box that processes payment card transactions. It's an element of First Data's multipronged strategy to get more business from small and mid-sized merchants. Edward Labry, the new head of First Data Commercial Services, said early this year when First Data reorganized its divisions that he would be making some major moves to reinvigorate First Data's huge merchant-processing business. First Data and its rivals want more business from independent sales organizations and small banks and processors whose portfolios of small merchants produce higher margins than those generated by large, price-sensitive national merchants. Greenwood Village, Colo.-based First Data unveiled its first initiative under that strategy this summer when it announced a deal to sign small and mid-sized merchants for Discover Financial Services LLC (Digital Transactions News, July 14). The first hints of the new First Data terminal emerged days later (Digital Transactions News, July 19). The FD-100 touch-screen terminal represents a hardware component of that strategy. The intended audience is sole proprietorships up to small chains of five lanes or fewer in each store. Barry McCarthy, senior vice president of product and business development, says the machine, which weighs less than two pounds, is priced competitively with rival products from major terminal makers such as VeriFone Inc., Hypercom Corp,. and Ingenico, though he wouldn't give details. First Data actually began distributing the terminal quietly about two months ago as a replacement for the Linkpoint AIO terminal. Linkpoint is an FDC-owned terminal brand, but the new terminals bear only the FDC name. “The response has been terrific,” says McCarthy. To get the FD-100, a merchant must have a relationship with one of First Data's many merchant-processing subsidiaries or affiliates?Chase Paymentech Solutions, Cardservice International, or a so-called merchant alliance with a bank, for example?or a traditional third-party processing deal through its bank or ISO. The terminals are being distributed through Tasq, a First Data-owned reseller. “We are seeing significant interest by merchants of all types, and in all of our channels of distribution, whether they are ISOs, revenue-sharing alliances, third-party alliances, etc.,” says McCarthy. The 9-by-5-inch FD-100 runs on Microsoft Corp.'s Windows CE 4.2 operating system, which McCarthy says gives it an advantage over competing terminals that run on proprietary operating systems and require individually configured applications. “That's very complicating for a bank to support and it's somewhat complicating for the merchant to support,” he says. “A common operating system like Windows CE is much easier to support.” The FD-100 is Internet-Protocol-enabled and supports dial-up communications, and can accommodate modules for Wireless Fidelity (Wi-Fi) capabilities. The device comes with a thermal printer and five USB ports, which means just about any peripheral device, such as PIN pads, check readers, or wireless-device readers, can be plugged into it.