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POS in the cloud

Bill Pittman and Andy Chau gravitate toward the cutting edge of payments industry technology. "There's a little bit of gray hair and lots of experience at SoundPOS LLC," said Pittman, co-founder and President of SoundPOS.

Pittman founded GO Software in 1993 and developed PC-based processing software PCCharge, now owned by VeriFone Inc., that Pittman boasts is the industry standard. He sold GO Software to ShopNow.com in 1999. It was then that he met Chau.

Chau, Chief Technology Officer at SoundPOS, had been the Chief Software Architect at 4thPass (now a subsidiary of Motorola Inc.) where he designed the company's original mobile application server that now reportedly services over 250 million users. Chau had spent several years at Network Commerce Inc. as a Senior Software Architect designing and implementing a payment transaction processing system. He'd also worked at Microsoft Corp. on the Microsoft Money and Windows CE teams.

Together, Pittman and Chau founded TPI Software in 2001 and developed SmartPayments, client-server transaction processing software that today is used by many of the largest U.S. processors and payment gateway providers, Pittman said. After Hypercom Corp. acquired TPI in 2007, the dynamic duo asked themselves what they would do if they could do it all over again. Their answer was to develop a next-generation POS solution built on security, new technology and ease-of-use - all on a software-as-a-service (SaaS) platform.

They formed SoundPOS in January 2009 to advance retail efficiency by applying new technology that would enhance retailers' POS solutions. SoundPOS collaborates with value-added resellers and merchant services providers to reduce costs, while improving efficiency for small to mid-sized retail merchants, Pittman noted.

Cloud computing

Pittman and Chau built the software behind SoundPOS based on the virtual cash register (vECR) concept. They capitalized on technology advances to bring to market a secure POS system delivered over the Internet. The result is software that ISOs can sell to help differentiate themselves from the competition.

SoundPOS offers integrated processing for a range of transaction types, including credit and debit card, ATM and electronic benefits transfer. It also provides electronic check verification, guarantee and conversion, as well as electronic signatures and receipts and check image capture and retrieval. Its secure, on-demand SaaS model allows retailers to take advantage of the latest technology while remaining focused on maximizing their growth and profit potential, Pittman said.

SoundPOS was recognized as a leading POS innovator in a March 2010 report by Mercator Advisory Group. The Boston-based advisory firm identified SoundPOS as "the first cloud-based POS solution provider to fully embrace the notion of the vECR," and thus realize the benefits of cloud computing. "Cloud computing is not really a new paradigm," Pittman said. "It's similar to the idea of using a mainframe where you share resources with dumb terminals, but it is an evolution of current products and technologies made possible by the Internet."

Pittman pointed out that payment terminals and cash registers only run payments, while SoundPOS provides software that leverages new web delivery technology. SoundPOS offers an open and secure hosted back-end infrastructure platform that provides these services to any device, on any operating system, at any time, Pittman explained.

Virtual electronic cash register

SoundPOS's vECR is a hosted, thin-client, browser-based solution that manages basic business processes such as sales history, receipts, cash drawer and so forth. The only setup requirements are a web browser and Internet connectivity, according to Pittman. The vECR solution is designed to be browser-based but actually functions on any web-enabled device. It's a simple-to-use graphical user interface built with the latest Ajax and rich Internet applications technologies, he said.

This creates a consistent user experience on any device running the program, Pittman added. Security issues are resolved by using SoundPOS' own architecturally distinct payment program, PayLink, which is Payment Card Industry (PCI) Data Security Standard (DSS) certified. PayLink routes transactions to PCI certified payment gateways for processing and leaves no sensitive payment information on merhants' servers.

Pittman believes any sales force can use SoundPOS to generate new hardware and service revenue. With the SoundPOS private-label program, applications look like an ISO's unique product, with its own brand and logo. Pittman said SoundPOS is priced for resellers, so ISOs can charge standard markup fees and still earn generous margins.

The solution is a competitive response to PC-based POS vendors offering bundled merchant services, Pittman added. It also allows ISOs to maintain control by routing transactions to their gateways/processors of choice. In addition, vECR is backed by dedicated sales and support managers trained to help customers grow, Pittman noted.

One satisfied customer is SureGate LLC. Cliff Gray, Chief Technology Officer at SureGate, said, "For us, SoundPOS' vECR represents the future and is a win-win for SureGate and our merchants. It's a modern, feature-rich product with all the benefits of cloud-based technology, including PCI de-scoping and maintenance-free upgrades for the merchant."

Mercator said more than half of the United States' 26.8 million small businesses are currently using computers. In the past, small businesses employed countertop terminals or browser-based solutions for MO/TO and low-volume walk-up sales. As the consultancy stated, the SoundPOS vECR solution is one of the first cloud-based retail solutions that helps small businesses utilize the benefits of cloud computing, including automated updates and low cost of entry.

Pittman emphasized that, with little information technology (IT) expertise required and only days needed for implementation, vECR is a win-win for ISOs and their merchants. It enables both parties to benefit from the latest technologies without having to invest in IT infrastructure and personnel. It is also geared for merchants conducting business in multiple places using multiple devices.

"We've designed this so it's turnkey," Pittman said. "If you have to read a manual to operate something, it's not worth it. Everybody wins if you don't need support, and you don't need support if it doesn't break down in the first place." This ease of use doesn't mean SoundPOS skimps on customer service, however: dedicated sales and support managers are at the ready to back the vECR service should any issues or questions arise.

Simplified payment integration

PayLink is a secure, hosted payment development tool that integrates with virtually any POS system, Pittman said. It's constructed like an e-commerce shopping cart integration, only for the brick-and-mortar, card-present retail world. PayLink off-loads the payment processing from the POS, processes the payment and returns to the POS a token for secure retrieval and tracking of the transaction.

Pittman explained that PayLink has an application programming interface that simplifies the integration process and reduces development time, costs and maintenance.

He added that the cutting-edge technology provides secure, fast, efficient and affordable payment processing to customers, so developers can focus on their own POS applications without having to become payment experts.

PayLink is Payment Application DSS certified, which can significantly reduce the scope of PCI compliance for merchants who use it. With enhanced-security payment processing off-loaded to a secure PCI certified data center, development occurs more quickly and cost effectively, according to Pittman.

PayLink secures data remotely, so a merchant's POS system never "touches" the card information, he said, adding that since merchants don't store card data in their systems, there is nothing for hackers to steal. In addition, PayLink also sports enhanced support for new PIN pads and signature capture devices.

Wave of the future

Financial services consultancy Gartner Inc. predicts that, by 2012, 20 percent of IT services will be provided by hosted or "in the cloud" solutions. International Data Corp. predicts global sales of cloud computing products will grow from $16.5 billion in 2009 to $55.5 billion in 2014.

Pittman believes ISOs should start looking into cloud-based POS services. "ISOs are facing tremendous challenges these days, including eroding profit margins," Pittman said. "We've built a solution that this channel can sell, a product to overcome the threats posed by the industry so the ISOs can be viable and successful in this arena."

ISOs maintain profitability by keeping their merchants profitable. Pittman said SoundPOS keeps its prices competitive for ISOs and merchant level salespeople so they can add revenue and profits but, more importantly, help their retail customers become more successful with products that will help them solve their business needs.

Pittman is confident that, with its solid back-end relationships with banks and other financial institutions, along with its cutting edge technology, SoundPOS can keep ISOs and their merchants competitive and growing. end of article

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ISO/MLS contact:

Bill Pittman
President and co-founder
Phone: 425-836-4251
Email: billp@soundpos.com

Company address:
20428 NE 66th Court
Redmond, WA 98053
Phone: 888-808-8465
eFax: 425-463-0507
Website: www.soundpos.com

ISO/MLS benefits:

  • Provides a simple, secure solution sales forces can sell
  • Generates new hardware and services revenue
  • Differentiates ISOs and MLSs with a private-label vECR
  • Reduces churn by delivering value-added services
  • Routes transactions through ISO's preferred gateway/processor

Company Profile originally appeared in
The Green Sheet Issue 101201

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