Many companies are trying to repurpose iPads as payment terminals. Leaf, a Cambridge, Mass.-based startup, instead created a commerce-specific tablet for small-business owners.

The appeal of smartphone and tablet-based payment systems is they take advantage of devices merchants might already own. Leaf instead asks merchants to consider an entirely new device at a time when business owners are already facing the potential costs of updating terminals to accept EMV-chip cards or contactless mobile payments.

The LeafPresenter tablet, being specifically built for commerce, provides more benefit to the merchant than using other tablets, says Aron Schwarzkopf, CEO of Leaf.

“We’re giving [merchants] a new fresh perspective into payments,” Schwarzkopf says. Leaf provides the hardware and software for customer relationship management and data analytics.

The current LeafPresenter device doesn’t accept EMV cards, but Schwarzkopf says the second-generation tablet, set to launch this year, will. It will also accept payments from Near Field Communication chip-equipped devices.

Leaf launched in January 2011 and today has more than 100 merchants using the LeafPresenter and is processing about $20 million in transactions per year, Schwarzkopf says. He hopes to see that number grow to half a million by the end of 2013. 

The company doesn’t make money off the payment but instead makes revenue by driving value to the merchant, Schwarzkopf says. This business model sounds similar to the one SCVNGR, another Cambridge, Mass.-based startup, uses for its LevelUp system. LevelUp's technology allows merchants to scan a bar code or NFC chip tied to a mobile-payment app.

While the two companies provide vastly different products, their approach of offering more than just payment acceptance is becoming a successful trend in the industry, Dave Kaminsky, senior analyst with Mercator Advisory Group.

 “When it comes to mobile point-of-sale, the original Square idea — the simple dongle that allows small merchants to except payment — is going by the wayside,” Kaminsky says. The market is overcrowded, but companies that offer additional services will have more opportunity to succeed, he adds.

Several other companies offer their own twist on the tablet.

HubWorks Interactive LLC started testing a tablet-based payment system in Buffalo Wild Wings in May 2012, allowing customers to order and pay from the device.  Also in May, NCR Corp. signed an agreement with HubWorks to integrate the technology into NCR's Aloha point of sale systems.

Square has lately been placing more emphasis on Square Register, which it says can replace a merchant's point of sale terminal.  

Many other companies offer similar card readers that attach to phones and tablets. Also last year, San Francisco-based GoPago began providing free hardware, including an Android tablet and card reader attachment to merchants.

Schwarzkopf emphasizes LeafPresenter's durability over add-on devices. Plus a commerce-only tablet will deter employees from using the device for non-work-related things, he says.

The company sends the first tablet for free, although merchants will pay a $50 monthly fee. Additional devices cost $250 a piece. Schwarzkopf says the system is cheaper than buying legacy devices and comparable to purchasing iPads.

Merchants will still have to pay fees to the processor, including monthly fees, individual transaction fees and a percentage of all payments, says Kaminsky. “Inherently using a standard tablet is going to be less expensive because they’re mass produced,” he says.

But the devices could be offered at a lower cost because it wouldn’t need all the features – retina display, large size, memory stores for music and video and 3G or 4G connectivity – that make multipurpose devices more expensive, says Rick Oglesby, a senior analyst at the Aite Group.

A commerce-only device may also deter employee theft of the tablet, which can be a big risk for merchants with technology in their stores, Oglesby says.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry