Poynt Recruits Chase Paymentech and Vantiv To Distribute Its New Terminals

Conspicuously absent from new point-of-sale terminal maker Poynt Inc.’s Oct. 30 unveiling was how the new company’s L-shaped, portable devices would be distributed. The answer to that question came Monday when Poynt chief executive Osama Bedier revealed that two of the nation’s largest merchant acquirers, Chase Paymentech and Vantiv Inc., will  offer Poynt’s open-platform terminals to small and mid-sized merchants.

Bedier, who oversaw Google Inc.’s Google Wallet and before that worked at PayPal Inc., made the announcement before about 7,000 attendees at the Money20/20 conference in Las Vegas. At a press conference later that evening, he said that more acquirers could be added.

Poynt is debuting at a time of flux and opportunity for POS terminal makers as the U.S. prepares for Europay-MasterCard-Visa (EMV) chip cards. And with the debut of Apple Inc.’s Apple Pay mobile-payments service last month, the moribund near-field communication (NFC) contactless payments technology suddenly got a new lease on life.

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

Bedier expects distribution to begin in 2015’s first and second quarters, once the terminals get the needed processor certifications. Poynt’s $299 device will support a variety of transaction types, including those from magnetic-stripe  and contact EMV cards, contactless/NFC devices, including smart phones, and payments using QR codes. It also has Bluetooth technology.

But the real purpose behind Poynt is to create what Bedier calls a “commerce network” that offers merchants business-management software along with payment processing services—a combination that Bedier as well as a growing number of 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 said.

The underlying software is based on Google’s Android mobile operating system, but the Poynt 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 said.

Developers will pay $499 for a software development kit that ships later this year. Six apps already have been developed, and Bedier predicts “thousands” more will soon be created. “We’ve gotten huge interest from developers,” he said.

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 that revenue with its partner acquirers. “There’s an opportunity here to make more money on software than payment processing,” said Bedier.

Poynt has funding from Silicon Valley based Matrix Partners, whose general partners include another former PayPal executive who worked with Bedier, Dana Stalder. “One of the benefits of Poynt is creating this low-cost distribution platform,” said Stalder. Neither Stalder nor Bedier would say how much Matrix has invested in Poynt.

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.