Will Merchants Get the Poynt?

The point-of-sale terminal market is at a pivotal juncture in its history. Upstarts such as Square Inc. and its imitators have shown small businesses that they can do just fine by using smart phones and tablet computers to accept credit and debit cards and dispense with costly, purpose-built payment hardware.

Into this roiling countertop sea comes Osama Bedier, the former head of Google Inc.’s Google Wallet venture and now chief executive of a new terminal company called Poynt Inc.

Palo Alto, Calif.-based Poynt is offering a sleek, $299 L-shaped device with two screens that’s more than just a POS terminal; it’s a “software platform” that will hold business-management applications, according to Bedier.

Bedier, who worked at PayPal Inc. before overseeing Google Wallet, revealed at November’s Money20/20 conference in Las Vegas that two of the nation’s largest merchant acquirers, Chase Paymentech and Vantiv Inc., would offer Poynt terminals to their merchants. More acquirers may be added.

Poynt is debuting as the U.S. prepares for Europay-MasterCard-Visa (EMV) chip cards and an expected boom in mobile payments. New companies and even Amazon.com Inc. sense opportunities at the point of sale.

“Poynt looks like an attractive and compelling product, but it is entering a very competitive space,” says Gil Luria, an analyst at Los Angeles-based Wedbush Securities who follows payments companies, by email. “Not only are there giants like Verifone and Ingenico, but other companies are trying to enter the U.S. [small and mid-size business] market as well—everybody from China-based Pax to Square, PayPal, and now Amazon.”

Bedier says he knew enough about the payments industry after leaving Google in 2013 to decide against trying to distribute terminals directly rather than the traditional way using merchant acquirers. “We’re not naive, we want to distribute through banks,” he said.

Bedier expects shipments to begin early next year, once the terminals get the needed processor certifications. Poynt’s devices will support a variety of transaction types, including those from magnetic-stripe and contact and contactless EMV chip cards, NFC-enabled smart phones, and payments using QR codes. They also have Bluetooth technology.

Poynt’s mission is to create what Bedier calls a “commerce network” that offers merchants business-management software along with payment services—a combination more acquirers see as an antidote to high merchant turnover spurred by price competition on basic processing. Vantiv recently bought Mercury Payment Systems, the leading independent sales organization in the so-called integrated payments space.

“Most importantly [Poynt] is a software platform … to do for merchants what the smart phone did for consumers,” Bedier says.

Poynt’s underlying software is based on Google’s Android mobile operating system, but its platform is open for software developers to devise all manner of applications for merchants, such as accounting, employee-management systems, and industry-specific programs. “Ultimately it will go all the way to advertising,” Bedier says.

Developers will pay $499 for a software development kit. Six apps had already been developed as of early November, and Bedier says “thousands” more will soon be created. “We’ve gotten huge interest from developers,” he says.

Merchants will be charged anywhere from $20 to $150 a month for each app, in line with what they pay now for business-management systems. Poynt will take 20% of those fees and share undisclosed portions of the revenue with its partner acquirers. “There’s an opportunity here to make more money on software than payment processing,” says Bedier.

Poynt devices have two touch screens, one 7 inches and the other 4.3 inches, as well as two cameras. A so-called quad core processor runs the apps, while a separate processor provides a secure interface for payments. The terminals will be manufactured by an undisclosed Asian firm with a Mexican firm as a likely back-up, according to Bedier.

Poynt has an undisclosed amount of funding from Silicon Valley-based Matrix Partners.

—Jim Daly