Does Your Company Have A Path To Sell POS-as-a-Service?

By Chuck Hebbel, Founder, CEH Leasing

“POS-as-a-Service” is a phrase that is the buzz in our point of sale (POS) industry. Does it mean the same thing to every VAR, ISO, or ISV?  Most certainly it does not and nor should it. The list of benefits for both the merchant and the POS provider is varied depending on your position in the market, your targeted customer, and your selling strategy. How did we get to be an emerging POS-as-a-Service industry, and where are we headed? 

The underlying principle for POS-as-a-Service is simple. The merchant pays a fixed monthly fee or a per-terminal fee is fixed based on the level of software services, maintenance services, hardware requirements, and usually ongoing support. For the end user, POS-as-a-Service is a great option to managing the cost associated with the POS functions needed to run and manage his business. It’s a great option to get the services they need without the cost of purchasing.

The three biggest factors affecting the POS-as-a-Service concept have been shrinking margins on traditional POS sales, iPad cloud POS solutions, and the merging of the merchant service ISO markets offering POS systems tied to credit card processing. For traditional POS sales, the margins have been eroding for years and for the majority of today’s one- to three-terminal sales margins for VARs are paltry. Only in the large POS configurations does the VARs profit margin still have value and that is solely due the size of the dollars in the deals. Selling POS-as-a-Service into one- to three-terminal segments is more profitable in the long run for the VAR. This fact must be taken to heart by POS sales organizations. It’s the largest segment of the market being serviced by small independent POS companies.

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