Last year, Osama Bedier introduced what he deemed the future of payment terminals: a developer-friendly payment point of sale that accepts everything from Apple Pay to Samsung Pay, Android Pay, and chip-based credit cards.
In order to deliver on the promise of the new payment terminal, Poynt needs to ramp up manufacturing.
Today, the company is announcing a series B round of $28 million to help it build and ship terminals before the year is out. Growth equity fund Oak HC/FT led the round. Stanford-StartX Fund, Matrix Partners, Webb Investment Network, and Nyca Partners also contributed.
Initially, Bedier says he plans on shipping “tens of thousands” of units.
Considering Bedier’s many years working on Google Wallet and leading product development at PayPal, it’s no surprise that his latest innovation is very forward-thinking. The Poynt payment terminal is an evolution of the tablet-as-point-of-sale trend. It features two touch screens, one for the merchant and another one facing the consumer. It’s capable of taking near field communication-based payments as well as traditional magnetic stripe credit cards and has a QR code reader. Bedier tried to account for all possible payment types that might take off with consumers over the next few years.
He also wanted to make the Poynt terminal flexible. Though it can act as a portable all-in-one solution, it can also act as a simple payment terminal connected to a larger point-of-sale system. Basically, the Poynt terminal can be as smart or as dumb as a merchant needs it to be.
Unlike PayPal and Square, Bedier said Poynt can integrate with existing payment systems. This is big. While small merchants accepting credit cards or chip-and-pin cards for the first time may be keen to adopt Square’s or PayPal’s models, Poynt is betting that larger merchants, who have already paid a lot of money on infrastructure, may be resistant to overhauling their point-of-sale systems just to accept chip-based credit cards. Bedier said he’s targeting a broad range of merchants, who process $50,000 to $10 million in sales annually.
To better integrate with businesses, Poynt is relying on a network of developers to build out its app platform. The Poynt OS is Android-based and already works with a variety of software platforms and payment processors including Intuit, Bigcommerce, Vantiv, Kabbage, and Vend.
In some ways Poynt is very traditional. It has a slew of financial certifications (PCI PTS, PCI-DSS, PA-DSS) and is sold through banks rather than direct-to-merchant, like VeriFone terminals are. However, Poynt is also progressive in the way it rejects the cobbled together point-of-sale system that has become popular with small merchants. The argument from Bedier is that setup, which relies on merchants buying a tablet or smart phone and connecting a dongle or wireless card reader, doesn’t work well for businesses over a certain size.
Like Square and PayPal, Poynt has timed its U.S. hardware release to coincide with the liability shift. In October, Visa and MasterCard relinquished responsibility for fraudulent chip card transactions made on terminals that aren’t equipped with a chip reader.
Poynt will have to be mindful of the competition, which has already begun shipping less-expensive multiple-payment terminals to merchants. The Poynt units cost roughly $299 each, well above the cost of chip readers by PayPal ($149) and Square ($49). VeriFone also has its own multi-payment terminal on the market, which also goes for $300.
In order to capitalize on the shift to chip-based credit cards, Poynt will need to move quickly to capture merchants who haven’t already been wooed by other new payment terminals.