Monday, March 10, 2014

New PayAnywhere (Free) Tablet Storefront Solution Is Here

First the good news: North American Bancard (NAB) has a new PayAnywhere branded mobile tablet-based processing program which offers the placement of a free counter-top system and some great new options built around a 10 inch Android tablet (plus an additional mobile card reader for phones or tablets). It is one of the most affordable processing solutions on the market that takes advantage of mobile solutions at highly competitive rates with a future-ready, upgradable combination of hardware and software. It will become EMV compliant and is consistently being updated on the software side to take advantage of the latest technology while offering more enhancements to merchants. The program is very similar to the previous Phone Swipe Tablet Program which NAB been providing, but without the high volume requirements.

Processing of Visa, MasterCard, Discover, American Express and the new PayPal card are all available with Next Day Funding and a lower swiped rate than Square or any "Pay As You Go" style programs, and still without additional transaction fees.

Having stated the good news, you might expect that there is bad news to counter it. But there isn't, at least not in the sense of anything new about the processing industry. Instead, there is the caveat that merchants still must deal with the same basic pricing and service of typical merchant accounts, including the PCI responsibilities and standard fees. Moreover, however, this program is not a "one size fits all" solution. If merchants are not processing over $5,000 in monthly charges, there is a good chance this program is not for them. On the other hand, it could save the right merchants a lot of money, offer a forward-thinking alternative to standard terminals and increase both productivity and profits. All will be revealed after the jump...

It's All About the Cloud

The latest trend in POS systems has been moving the data to the cloud. This is great for businesses, as it allows monitoring from remote locations as well as secure backups of data and an increased ease in conducting outside sales. However, most cloud-based POS solutions come with relatively steep monthly and annual fees. Call them license fees, support fees, technology fees or security fees, but they all come down to paying more for the service. Unless the hardware and software are offering very specific solutions that the merchant needs, whether it is time-logging of employees or strict inventory control measures, the merchant should consider whether a solution like Shop Keep ($49 per station per month), GoPagu Live ($69 per month) or Mercury Payment's Instore ($99 per month) are worth the cost -- not to mention that none of those fees include the cost of equipment, which will cost hundreds of dollars more. While these systems all offer a host of features and POS functionality of varying degrees, most retail merchants and quiet a few small food-service merchants do not need every feature offered by these expensive systems. Providers like SquareUp and North American Bancard have been developing strong tablet solutions that don't carry the high monthly fees and NAB has been leading the way in new development with its Phone Swipe app. But now, the new PayAnywhere Storefront solution is changing the processing landscape.

No High Monthly POS Fees

For the roughly same basic monthly cost of a traditional phone-based, stand-alone card swiping terminal, NAB now makes it possible to step right into a feature-rich tablet that allows for easy sales tracking, multiple users on multiple devices and inventory syncing. While not a complete POS solution like Harbortouch, it offers all the benefits of the PayAnywhere / Phone Swipe software and web-based back office. Pricing is simple, starting with the no-cost tablet and additional card reader, which alone could save the merchant over $400 when compared with the other programs that require merchants to pay for their own iPads. The monthly service fee is $12.95, compared to the $49-$99 fees of other programs. The PCI fee is $79 per year, while other processors often charge up to $150 for the same thing. Merchants have the option of purchasing their own cash drawer and printer if they need one, or they can rent from NAB ($14.95/month for a printer or $19.95 for a printer and cash drawer together), but these items are easily found on eBay or Amazon for reasonable prices and many merchants simply do not need them.

Rates and Fees of the PayAnywhere Storefront Program

This is where merchants can see both the good and the possibly not-so-good pricing of the PayAnywhere program. While merchants can always take advantage of the stellar Pay-As-You-Go pricing available with Phone Swipe, which is generally the best solution for merchants who do less than $2,500 in monthly card sales and comes with no long-term contract, this PayAnywhere solution is geared toward merchants who process over $5,000 monthly.

Pricing Overview

Outside of the monthly fee and the PCI compliance, the basic costs are the percentages and transaction fees. As with PhoneSwipe and Square, this program largely does away with the transaction fees. Unless charges are keyed in manually, for which each transaction is assessed $0.19, there are no transaction fees for this program. That's right: swiped charges are not charged a transaction fee, which even under the best Interchange Plus pricing includes a $0.10 cost for credit card swipes and a $0.22 cost for check/debit card swipes passed through from Visa, MasterCard or Discover. If a merchant had $5,000 in  swiped charges with an average ticket of $15.00, that could easily translate to a savings of $50.00 (based on a roughly even split of credit and check cards). But the pricing gets better.

Initially, most accounts will be set up with tiered pricing. While it is often in a merchant's advantage to seek Interchange based pricing, the tiers offered in this new program are highly competitive and among the best in any mobile plan on the market. If the merchant takes a lot of American Express cards, this becomes even more appealing, because AMEX has special pricing with PayAnywhere and Phone Swipe accounts. For the PayAnywhere Storefront solution, basic transactions of credit and check cards with the Visa, MasterCard, Discover and American Express branding go through at 1.69%, as well as the new PayPal card. Commercial and Rewards cards are swiped at a rate of 2.69%, which is actually lower than most tiered solutions from any processing company, and still without a transaction fee. These rates are lower than any other mobile processing solution. Keyed transactions have a rate of 3.69% and the aforementioned $0.19 transaction fee, clearly making this the wrong solution for mail order or phone order based businesses, but a money-saving solution for front-facing merchants who swipe cards (and more so for those with many American Express users in their client base).

Fine Print to Watch Out For

If this all sounds too amazing to be possible, that might be correct. At least for merchants who process less than $5,000 monthly. And I mean every month, not on average. In fact, by absorbing the cost of the transactions into the percentage, this type of pricing only becomes sustainably profitable for the company with enough volume. To cover itself and prevent loss of profit on these accounts, NAB imposes a "Monthly Volume Processing Fee" on accounts that do not process above $5,000 on any given month. And that fee is hefty. In fact, the "standard" cost is $79 per month, though agents setting up this type of account have the ability to lower it somewhat, but not make it disappear altogether. 

So, to be clear, if a merchant only processes $4,995, there could be an additional cost that month of up to $79 as a "Monthly Volume Processing Fee" on the statement. This is different from a processing minimum in that the entire fee is due regardless of how much was paid in processing fees. For this reason, and for this reason only, I will not recommend this plan to merchants who do not reliably exceed $5,000 in card-based sales each and every month. Merchants who do smaller volume sales should be wary of agents pushing this program if they have already examined recent statements. (Note: 1% of $1,000 is $10, so a savings of a full 1% on rates will only be $30 for a $3,000 per month merchant. Don't let that be a winning argument for getting lower rates if the associated fees might be double the savings on percentages. Always do the math!)

What You Get in the PayAnywhere Storefront

Aside from terrific rates and low monthly fees (for merchants who do above $5,000 in monthly processing volume), the basic package comes with some nice perks.

Hardware

The heart of the hardware is a custom 10" Android tablet. While not all of the Android features will be wide open for use, some of the functionality will remain, such as access to the browser and potentially more approved apps. Because of security concerns, the system will be partially locked to prevent unapproved installation of apps that might compromise the data or conflict with the primary PayAnywhere app. Merchants can still install the app on their own tablets, but the one offered as a free placement with the processing agreement will be fully tested and fully supported. It also comes in a custom frame with a counter-top stand and built-in card reader. 

Stands generally cost between $99 and $300 dollars, and that is without the card reader which some companies charge over $100 for (though you can get additional PayAnwhere or Phone Swipe compatible card readers for $10 on Amazon or at many office supply stores which can be used with ANY version of the Phone Swipe or PayAnywhere app on compatible devices which include many Blackberry, iOS and Android phones and tablets). But this program comes with the stand and not one, but two card readers at no cost. The first card reader is built into the tablet stand, the second is the traditional PayAnywhere or Phone Swipe audio jack card reader manufactured by RoamPay. This way, merchants have the ability to take an additional point of sale device out of the store for remote sales, or use a second tablet in-store for an additional, linked terminal at no additional monthly cost. Better yet, both devices can be logged into by separate account IDs which will allow the merchant to later analyze the performance at each station or track outside sales compared to those at the main terminal.

Additional hardware is available or will become available. Bar code reader and digital scale integration are both being developed, while printer and cash drawer integration has been expanded. At this time, NAB will rent a cash drawer and printer to merchants who do not own one, though both items are available in many marketplaces online at reasonable costs. (Hint: you can do better than the $299 which the competition charges for their Star Micronics TSP143 -- checking online shows prices ranging closer to $199 with only a brief search. Cash drawers are available for considerably less, too, with sub-$100 units available readily from sites like NewEgg, and save even more with a manually operated drawer that doesn't need the app to open it.)

It should also be noted that this particular tablet uses a WiFi signal to process the transactions and as such does not need to be tethered to a phone line. It does, however, require a secure WiFi signal, preferably one that is not shared on a community network. (Many routers will allow for multiple network channels, but it is best to keep your processing behind a secure firewall when possible.)

Software

The app at the heart of the program is an updated version of NAB's popular Phone Swipe and PayAnywhere product. While these two brands are essentially distinguished only by being inside sales (PayAnywhere) or outside sales by an affiliated agent (Phone Swipe), the Phone Swipe brand was available in more "flavors" (with custom pricing) than the non-customizable PayAnywhere program. Additionally, Phone Swipe was known for having a better support system in place for merchants, beginning with their associated agent and leading through to dedicated support lines for 24 hour live support. However, the company had put considerably more money into the brand recognition for PayAnywhere and decided that the two brands would gradually merge starting with this product launch.

Advancements occur quite frequently with the development of new features on both the device app and the online portal. The app has planned feature updates like adding modifiers to sales items and inventory tracking, making the system more like a full-POS solution. It already has a robust inventory log which assists with fast check out, custom tax options, invoice logging, tagging and sorting features. It is perfect for a small café that does not need to track consumables, or a mid-size retailer that does not rely on the processing terminals for inventory tracking. However, sales tracking becomes quite simple, with the web portal allowing for a range of custom reports that can cover a single day or the whole year (or more), sorted by product, category/tag or user ID.

The software is also being developed to offer a targeted marketing service that will be able to push offers to customers. This will assist merchants with boosting sales in areas that are lacking.

Why It Makes Sense

The initial target market for this program is the merchant who wants to update a traditional counter-top terminal but does not want to shell out the excessive costs of a full POS system. The low tiered rates are a terrific draw, but the sweet spot here is all the value-added aspects of the software, both in the app and online. It allows the merchant to monitor sales, run custom reports and even export data from the portal to Quicken or to an Excel spreadsheet for accounting or analysis.

The flexibility of the hardware makes it possible to set up shop in remote areas of a store, even where there is no phone line or power outlet. The additional card reader expands the sales options considerably, whether that means a second terminal in the store or a door to door approach outside the main location. Being able to run reports on multiple outside sales personnel or various registers inside a retail location can offer valuable insight to merchants who want to optimize their business. And like many of the best solutions on the market today, there is no upfront cost on the primary equipment. Only a handful of tablet based solutions are on the market, most of which require a third-party gateway to process charges. The market is dominated by apps for Apple's iOS, but NAB has decided (perhaps in part due to Apple's tendency to change hardware and system requirements so dramatically with each new product release) to focus development on Android first. While it already has the superior iOS processing solution, new advancements will come to Android and then migrate to iOS shortly thereafter. [Blackberry is still supported as a secondary device (as are supported phones, iPods and such), but without the full functionality being developed for the Storefront tablet solution.]

When tracking sales is important to a merchant, including the ability to sort by date, time, item or geographic location, there is no other option on the market without high monthly fees that can provide this level of information. And with only a $12.95 monthly service fee, this is still one of the most competitively priced processing solutions on the market for merchants with over $5,000 in monthly volume.


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