Poynt Co., a startup headed by former Google and PayPal executive Osama Bedier, is looking to take advantage of the EMV hardware upgrade schedule to entice merchants to switch to its new app-based payment terminal.

Poynt's terminal, which it is offering for pre-order, is designed to offer basic payment capabilities to all users with customized functions available as apps. The startup is taking aim at mainstream terminal makers Ingenico and VeriFone, who together account for about 90% of the U.S. payments terminal market, according to Poynt. It is not trying to compete with other tablet-based point of sale vendors, the company says.

"With EMV, this is a once-in-a-lifetime opportunity that will cause a massive refresh in payment terminals," said Rishi Taparia, vice president at Poynt. "Instead of [merchants] buying the same terminal with just an additional slot…we're putting out a smarter one that bakes in all the technology."

The card networks set an October 2015 deadline for most companies to support EMV-chip cards, which are more resistant to counterfeiting than magnetic-stripe cards are. After that date, a company unable to accept EMV cards faces an increase in fraud liability.

Poynt's terminal, which has both a consumer- and merchant-facing screen, can accept magnetic stripe, EMV chip-and-signature and chip-and-PIN, Near Field Communication contactless, QR codes, bar codes and beacon mechanisms for payment.

Businesses like ShopKeep, Vend and PayPal can build applications on top of Poynt's payment terminal, said Taparia. While not all these point of sale providers may want to give up their processing revenue to work with Poynt, Vend has already built an app on Poynt. Vend charges a monthly fee for use, and Poynt will take 20% of what Vend makes off merchants, said Taparia.

Poynt's founder and CEO, Osama Bedier, previously worked for PayPal and then Google, where he worked on the launch of Google Wallet. He left Google in 2012 "to pursue other opportunities," Google said at the time. He sits on the boards of Qiwi, WePay, Payrange and Coin.

Poynt is working with six developers to create a small-business application ecosystem. Other alternative point of sale providers, such as Leaf, also take an app-based approach to merchant hardware.

Newer entrants that have created mobile card readers have captured only about $35 billion in processing volume of the total $5 trillion in credit card processing that happens in the U.S. every year, Taparia said. "That's less than 1%; it's not a revolution," he said.

Poynt also doesn't handle processing itself, instead telling merchants to keep their existing bank as the processor.

The terminal costs $299 and comes with three Poynt-built applications: Terminal; Register, which can connect to a merchant's existing technology such as a cash register; and Co-Pilot, a big data app for helping merchants understand their business.

The device also has an eight-hour battery and cellular wireless, enabling it to be carried around the store. Plus it has a hybrid card reader, which reads both the back and front of the card and tells the consumer whether they need to keep the card in to read the chip or whether they can pull it out because it's a mag-stripe card.

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