Free-Terminal Kingpin Launches Integrated POS System for Merchants

It spawned the free-terminal craze, but now merchant processor United Bank Card Inc. is launching a service called Harbortouch POS intended to put the margin back into equipment sales to merchants. Harbortouch's business case is built on integrated hardware and software systems that perform a host of business-management functions, payments being just one. UBC, which serves 100,000 merchant locations and has annualized charge volume of $8 billion, by no means is abandoning the free-terminal program it started a few years ago, says Brian Jones, executive vice president of sales and marketing. “That will continue,” he says. The program, aimed at small merchants with relatively simple payment-processing needs and looking for minimal up-front costs, attracted a host of imitators, though some researchers say the result has been lower acquiring-industry profits (Digital Transactions News, Dec. 5, 2007). With Harbortouch, United Bank Card is targeting small and mid-sized restaurants and retailers looking to get an integrated, full-service package from their merchant processor. United Bank Card's 850 affiliated, active independent sales organizations will sell the service. The core system consists of hardware from Toshiba America Inc. that runs Microsoft Corp. business applications for retailers as well as specialized software for restaurants from undisclosed vendors. Besides payments, the systems can handle order processing, inventory control, payroll processing, employee time and attendance, and other functions. “What you get is probably one of the most comprehensive solutions you're going to find in the market,” says Jim Surber, UBC's Harbortouch director. “We're changing the paradigm of the payment system.” And in contrast to common set-up procedures in which a small merchant plugs in a new terminal and gets it running himself, United Bank Card is offering on-site installation and training in addition to 24-hour customer service. “We're re-taking a program that a Target or a Wal-Mart would get and we're taking it all the way down to the small merchant,” says Surber, a former Toshiba executive who joined United Bank Card about six months ago. Jones adds that the integrated hardware and software packages will make it more difficult for merchants to switch processors. “Your attrition goes to zip,” he says. Neither Surber nor Jones would comment about pricing. But a recent UBC news release issued just after executives completed a month-long road show to introduce Harbortouch to ISOs speaks of United Bank Card's partners being able to get equipment at an affordable price that will bring them “a very high profit margin.” If it catches on with merchants, Harbortouch's system also could challenge some entrenched vendors in niches such as hospitality, where equipment from Toshiba rival Micros Systems Corp. is a favorite among restaurateurs. United Bank Card isn't alone in trying to sell merchants more than a conventional terminal. First Data Corp. introduced its POS Value Exchange program in January 2007, which is built around Hewlett-Packard Co. personal computers and Microsoft applications. “Payment is becoming such a minimal part of what merchants do, if you can streamline it into a bigger part of software that does 70% of their business, they will go for it,” says processing-industry analyst Adil Moussa of Aite Group LLC, Boston.