Building an end-to-end solution for the payment formats of today—and tomorrow
Electronic payment options for consumers are proliferating, and shoppers expect merchants to accept the full gamut of form factors. But for retailers—especially small and midsize enterprises (SMEs)—it can be tough to keep up. That’s where Poynt comes in. The brainchild of payments veteran and Google Wallet creator Osama Bedier, Poynt offers a fully integrated hardware and software solution that enables SMEs to accept virtually any electronic payment type: magstripe, EMV, NFC, QR code and Bluetooth beacon.
Bedier began conceiving Poynt several years ago, as he noticed the widening gap between smartphones and tablets consumers were using and the relatively “dumb” payment terminals used by merchants. The opportunity was there to take a different approach by building a mobile smart terminal from the ground up, so Bedier began working on the concept soon after leaving Google in the summer of 2013. By that September, he’d assembled his new team and founded Poynt, with financial backing from Matrix Partners and Google Ventures, among others. Just over a year later, the company unveiled its prototype at the 2014 Money20/20 conference in Las Vegas.
The Poynt terminal is a small device that fits on a countertop or in-hand. It has two touchscreens (one customer-facing, one merchant-facing), built-in wifi and 3G capability, micro USB connection, and an eight-hour battery. From the start, Bedier knew the terminal would need to accept any payment option available to consumers. “We’re in the age of multiple payment methods,” Bedier tells Paybefore, noting that the current payment acceptance environment includes everything from 50-year-old credit card magstripe technology to the latest in mobile contactless functionality. “There’s no such thing as an abrupt change in payments,” he says. That stickiness, combined with the rise of consumer demand for an omnichannel shopping experience, highlights the need for a solution that supports the payment methods of yesterday, today—and tomorrow.
|Getting to Know Poynt
Location: Palo Alto, Calif.
Open for Business: September 2013
Secret Sauce: Poynt is a technology company dedicated to modernizing the tools merchants have access to. We work to create powerful and elegant products and services for merchants, which will enable them to run their businesses, use their sales data and serve their customers like never before. In short, we’re using cutting-edge technology to give merchants super-powers.
Founders: Osama Bedier
Funding: Series B led by Oak HC/FT, with participation from Stanford-StartX Fund as well as previous investors Matrix Partners, Webb Investment Network and Nyca Ventures
Business Philosophy: At Poynt, merchants are the North Star for everything we do. We want to serve them with the same passion with which they serve their customers. And we think technology has left merchants behind. Consumer tech has rapidly evolved in the last 30 years, but most merchants still are limited to things like single-utility, dumb terminals. Though reliable, these legacy tools are basically decades-old technology. The company was built on the idea that business owners should have access to the same kind of groundbreaking technology found in the smartphones in every consumer’s pocket.
Something You Might Not Expect: At 5 p.m. on Fridays, every single Poynt employee gets up, walks around and gives a high-five to every co-worker. It started when we were just a few employees, but it stuck even as we got big. And it shows no signs of stopping!
After the Poynt prototype’s debut in late 2014, Bedier and his team spent the next several months testing the product and passing multiple certifications from the PCI Security Standards Council and EMVCo. During this period, they raised an additional $28 million to support their growth and scale. In the fourth quarter of 2015, Poynt began shipping devices for trial runs to coincide with the migration to EMV kicking into high gear—a period Bedier calls “the biggest payments infrastructure change in U.S. history,”—with many merchants upgrading their POS systems to accept EMV-equipped payment cards. But while updating acceptance hardware might be a matter of course for major retail chains, the value of doing so might not be as clear for smaller merchants. “Some merchants might be reluctant to buy new hardware based on just the security aspect of EMV, which they sometimes can’t get their arms around,” notes Bedier, “So it really increases the value proposition to also enable them to accept all different payment types on one device.”
To more effectively reach its SME target market, Poynt distributes through acquiring banks and ISOs, entities that merchants have long-lasting relationships with. At the moment, Chase Paymentech and Vantiv are signed on as distribution partners, with more U.S. banks to come. Each terminal has a purchase price of $499, with no additional transaction fees; instead, Poynt takes a percentage of revenue from app sales (see below). And once a retailer has adopted Poynt, it’s set to accept all types of payments for the long term. “We’ve made our solution future-proof,” Bedier says. “So when a merchant starts using Poynt, they’re not just catching up with the past; they’re ready for the future.”
While Poynt’s smart terminal is the most visible aspect of its offering, the device only serves as the foundation for a platform that extends well beyond point of sale. Poynt features an app store where merchants can obtain add-on services from third-party developers, including loyalty management, inventory, and industry-specific apps. The open-source system enables developers to create and sell applications, similar to Apple’s App Store. Apps currently available include financial management services from Intuit, restaurant POS services from Kounta, and a retail-focused app from Vend, among others.
Apps are a central part of Poynt’s revenue model, too. The company sells terminals at near-cost and doesn’t charge merchants any transaction fees, instead taking a percentage of fees third-party developers charge merchants for apps. That way, merchants can create a customized POS solution, and need only pay for the services they actually use.
After spending late 2015 getting its devices into stores for pilots, Poynt is looking to steadily expand its footprint this year, scaling up terminal production and adding new developer and distribution partners. In October, the company announced a partnership with Rede (pronounced “he-jā”), the acquiring subsidiary of Brazil’s largest bank, Itaú Unibanco. The deal will make Brazil the first country outside the U.S. to offer Poynt to merchants.
While there remains much work to be done to get Poynt to scale, the Google Wallet founder is confident the high-tech platform and his own experience in cutting-edge payments will secure the company’s future. “I’ve made a career on betting where payments are going,” Bedier says. “And the time is now for a future-proof solution like this.”
- PCI Certification in Hand, Poynt Readies Rollout
- Q&A with Osama Bedier: Making a Poynt
- Google Nears Launch of Next-Generation Wallet