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POS and Payment Industry 2019

POS and Payments Channel Predictions 2019

We have started the year with a lot of excitement. First data was acquired by Fiserv. I was at the NEAA show and we all woke up to that news. What does this mean? First data had a major overhaul the last few years, a new CEO, new products, and they went public for the second time. But with$17 billion in debt, Fiserv was their only way out. Another thing First Data recognized was that Clover was not the POS solution for all business types, and they truly were not able to penetrate the table service business. Because there is no one size fits all POS solution in the world. What boggles my mind is that they never acquired a good cloud-based restaurant POS. With Micros and NCR losing market share by day, what an opportunity was left on the table.

Bank of America seems to recognize that opportunity and invested in Talech for the restaurant vertical. A good move for BOA merchant services, but not good for the ISO who will be competing with them. When financial institutions start seeing the daily transactions of the customers and start giving loans and services to make their offering sticky, it is not good for your typical ISO.

Every bank who is in the checking account business should partner or own a solution for their merchants or they will lose those merchants very quickly.

It should not be a surprise to anyone that FIS will most likely buy Tsys this year.

Worldpay is likely thinking that they need to start going the direct model as well. Both Worldpay and Revel put out press releases suggesting there might be an acquisition this year.

Next in the news was Mobile Bytes. I cannot believe all the dealers who signed up for Mobile Bytes, truly believing that a cloud POS system can be sold in territories. When the whole world is connected to one another via internet and cloud technologies, why would someone want to be limited to selling in one territory?

Long story short, many dealers who were also registered ISO are not happy, and they are determined to move their book of business to another provider before Heartland starts pushing them to use their own processing. Then the processors with payment and ISO relationships will start losing their revenues. Even the buy rates could be competitive for these dealers. Who will guarantee that Heartland will not raise prices on their merchants 6 months from now? It will not be Heartland that faces the merchants, it will be the dealer.

And as we have been, Benseron Hospitality will continue to welcome many of them.

As the old players are having a hard time competing with the technologically advanced new players, I have a feeling some of the big brands like Oracle Micros, or Par might be getting out of this vertical by spinning off their POS side of the business. At least I wouldn’t be surprised if that happens; I am betting on it.

The situation at NCR is changing as well. I think there are 40 + NCR partners in the USA and yesterday they had their first virtual partner kickoff (usually it is always been at a high-end tropical resort). The strategy at NCR appears obvious; I believe they have already written off the partners and they are going to announce a SAAS model for Aloha customers, which will most likely to take some serious business away from partners. NCR is trying to build a direct connection to customers and slowly phase out the dealers. The change in the reseller agreement of NCR, to allow NCR dealers to sell competitive products, tells me they do not want a class action suit in the future.

I am 100% sure that the next product released as the successor of Aloha will be sold directly to customers, eliminating the dealers. It appears that NCR has all new executives which do not know the POS business, but they know how to make money. After the JetPay acquisition I believe they will start bundling Aloha licensing with card processing accounts.

Let’s summarize:

1. FIS will acquire Tsys
2. Worldpay will acquire Revel
3. Par will sell the hospitality portion of the business
4. Oracle will sell the hospitality portion of the business
5. NCR is getting ready to go direct to its customers.
6. Partners should look for a new solution ASAP.

Onur Haytac, CEO