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Table of Contents

Lead Story

Outside forces impinge on payments in 2011


Industry Update

California Lucky's unfortunate breach

Experts discuss the future of mobile payments

NRF sues Fed over Durbin regs


SMBs: Security must become serious

Bill Farmer
Mako Networks

An interview with Marc Abbey

Ken Musante
Eureka Payments LLC

Status report: U.S. economy Q3 2011

Selling Prepaid

Prepaid in brief

Will prepaid pivot with Green Dot's purchase?

'Smart' gifting gears up


Thinking outside the bank

Patti Murphy
ProScribes Inc.


Street SmartsSM:
EMV's time is nigh

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

QR codes - the new call to action

Stephen Enfield
POS Supply Solutions

Fraud trends 2012: Like 2011, only more so

Nicholas Cucci
Network Merchants Inc.

Crisis management as opportunity

Dale S. Laszig
Castles Technology Co. Ltd.

ISOs welcome in the POS waters

Jerry Cibley
United Bank Card Inc.

Parlay tradeshow costs into social media bonanza

Alan Kleinman
Meritus Payment Solutions

Company Profile


New Products

All-in-one payment platform

FrontStream Payments Inc.


Use your human gifts


10 Years ago in
The Green Sheet


Resource Guide



2012 Calendar of events

A Bigger Thing

The Green Sheet Online Edition

December 26, 2011  •  Issue 11:12:02

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ISOs welcome in the POS waters

By Jerry Cibley

In the old days - the 1990s - restaurants routinely shelled out $30,000 to $40,000 for a four-terminal POS system. POS companies were making profits with margins sometimes exceeding 70 percent. It was a great time for merchant level salespeople (MLSs) and POS company owners alike, but not so great for merchants.

Then, the mid 2000s saw an influx of POS companies that began to offer low-cost and do-it-yourself products that could be purchased for under $2,500 per station. Although many merchants were still buying $30,000 to $40,000 systems, the introduction of these lower-cost systems was a sign of things to come.

Now, the industry I grew up in is undergoing a radical change. We have seen a huge paradigm shift from the traditional model that was the norm more than seven years ago to the current model of today.

The way we were

In the 1980s, VeriFone Inc.'s Zon Jr proudly had its place in restaurants and retail operations. POS companies and credit card processors existed side by side, without territorial boundaries or divisions - the former stuck strictly to the POS business, while the latter only provided merchant services. We didn't bother each other, and we had little need for partnerships. That seems like such a long time ago.

As a POS man, I had never heard of the residual streams that are so central to the ISO world. Now I think, How dumb could I have been? But card processing was not my business, and at the time the POS and ISO worlds were completely different.

I remember my first dial-out credit card integration to my DOS-based POS system was called "Touch 'n Serve." We sold it, supported it, troubleshot it and lived with it; but no one mentioned money. We earned no additional income from this setup. We received no residuals.

Getting in on the act

The POS dealers wised up in the early 2000s and made alliances with credit card processors. Sometimes it was a choice between residual-sharing or leads-sharing. The bottom line was the possibility of getting a significant income stream from a relationship with the processor.

In 2008, I elected to sell my regional POS dealership in Massachusetts. I had tired of the 3 a.m. phone calls that my technicians routinely slept through. The downward trend in the economy, coupled with the virtual extinction of financing for startup operations, made me look for greener pastures.

I was approached by an ISO who said he wanted to have his own POS dealership in order to secure his portfolio. It was a novel approach, and I jumped at the offer. I agreed to remain with the company during the transition and was amazed at how much easier it was to sell POS systems when I could offer in-house financing and competitive rates, as well as provide discounts on the overall system.

A good thing, with limitations

I dreamed of taking this concept national, but our contract with the software developer restricted our sales territory to 100 miles of our office. The software vendor was not happy that I had sold out to an ISO because the vendor was no longer getting residuals on my portfolio.

Nobody likes to give up income, and I could not blame the vendor for its reaction, but this was business. The ISO I sold to was not in a position to negotiate huge volume purchases on hardware, which would have allowed us to become even more aggressive and competitive on pricing.

Our success was short-lived, as other national processors had the same ideas relative to the POS business. Soon, the major players wanted in on the action. A number of processors and super ISOs began rolling out POS programs geared toward ISOs and MLSs.

The advent of the free program

POS vendors can still find opportunities to sell $40,000 systems. But today, our industry finds many more opportunities to place a POS system through one of these new, less expensive and possibly free programs. Some even offer 24/7 support, a lifetime warranty, free installation and training.

The perspective is a bit different, but the residual stream is protected and some of the roadblocks to traditional sales of POS systems have been lifted.

Is there room for both the traditional POS dealer and the new model of ISOs offering POS systems? The answer is a resounding yes. POS dealers are actually embracing the merchant services-POS model and are increasing their offerings to include free POS programs. But in this case, the ISO market has a chance to stay ahead of the curve by partnering with one of the processors or super ISOs offering these programs.

Yes, there is room for both ISOs and POS dealers to thrive and prosper in this new POS market. C'mon in, the water's fine.

Jerry Cibley is a 25-year veteran of the POS industry. During his career, he has been the founder of three POS dealerships servicing New England. Today, Jerry is the National Sales Trainer for United Bank Card's Harbortouch POS division. As National Sales Trainer, his role with UBC is to train the company's sales partners on the intricacies of the POS business so they can become POS experts themselves, ensuring their success with the free Harbortouch POS program. Jerry can be reached at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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