As the demographics of fast food shift, so does the technology

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Quick service restaurants and small business owners are turning over, revealing demographics that fit neatly with Verifone and Paysafe's collaboration to sell semi-integrated, cloud-based payment terminals.

Houston-based Paysafe will become the first acquirer to deliver Verifone's Carbon and Engage terminals to those markets with Verifone Connect, which has a tool menu that includes business, marketing and loyalty programs.

The companies expect reception from tech-savvy and knowledgeable business owners who understand integrated point of sale (POS) systems and the potential to add customer relationship-enhancing applications.
"The Gen X and Gen Y (owners), those younger people, are driving the ingenuity of the market," said Joe Mach, president of Verifone North America. "And those are the people who latch on to these more robust solutions."

Many merchants in the QSR vertical may already be satisfied with the functionality of their current terminals, but innovation is providing more robust payment and loyalty applications, Mach said.

"You can think of an integrated terminal like Carbon being in operation at a small coffee or sandwich shop, just down the street from a Starbucks," Mach said. "Verifone now plays on both ends of that with integrated POS at the large chains, but also in the local shops enabling them to create unique experiences for their customers."

As such, the pitch for embracing the modern and mobile POS terminal has changed. It has moved from touting acceptance of all payment types to tailoring the terminal to a specific marketplace and desired audience. For young business owners, it is easy to relate to such a capability, making it akin to downloading smartphone apps.

By adding Verifone Connect to the mix, restaurant and small-business owners will be able to "very intelligently and efficiently use the product to mix and match different apps and tools" to serve a variety of different verticals, said Todd Linden, CEO of payment processing in North America for Paysafe. "They can do this without having to really customize the actual payment application."

Paysafe can build an app for a merchant who can draw loyalty from consumers in a college town and put it into the Connect product to make it unique for that market, Linden added. "Yet the same system can be used in a bigger city, with apps tailored to that market."

With that flexibility, Verifone hits on a vision it has had for the Carbon and Engage POS systems since their launches. Small business owners can now have the tools that allow them to compete with and, in many ways, operate in the same manner as larger chains.

Paysafe plans to initially approach its 100,000 merchants in the QSR and small-business sectors and sell the upgrade through independent sales organizations.

Paysafe Group late last year acquired Merchants Choice Payments Solution, a processor that grew through the ISO channels. The acquisition boosted Paysafe's U.S. presence, and the company now hopes to replace the equipment in its existing base, whether it is older terminals or maybe even mobile devices that need an upgrade.

"We are going to transform our ISO channel into a generic merchant independent software vendor channel, which has been a personal goal of mine as an executive," said Linden, who was part of MCPS. "It's the way the business is moving and a great way to make a genuine commitment to our small businesses to grow through consumer engagement at the POS."

Even with the advancement of integrated POS technology and younger business owners who understand that lingo, it remains a crowded marketplace with the likes of First Data's Clover POS, Revel and Square Register.

"I would agree that there are more tech savvy business owners than before, but you have to remember why Square has been popular in the first place," said Paul Martaus, a merchant acquirer consultant and industry researcher. "The primary reason is they took the POS compliance and other tasks away from retailers and said they would take care of it, all while charging a single rate for transactions."

Generally, merchants would like to be aware of technological advancements, but many still do not fully understand the benefits of having data-driven analysis at their fingertips, or the ability to launch a loyalty program based on those analytics, Martaus said.

"For years, they have not had the insight nor the imagination to envision what a POS could really do," Martaus said. "But increasingly, there are those who understand and, especially in a restaurant setting, they are seeing that new technology can help them turn over tables and bring in more customers."

It's also changing the face of the payments industry because merchants can now make choices about what they want the payment terminal to be able to do for them.

"Verifone really wants to lay functionality into their product set, and that absolutely is a key factor," Martaus added.

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Retailers Point-of-sale Verifone First Data Revel Systems Square