It wasn't long ago that mobile point of sale companies like Shopkeep were the alternative, the way for very small merchants to finally start accepting cards.

But these companies, including Square and Stripe, have been challenged as they’ve grown to  scale quickly to manage both higher payments volume and more complex merchant services. For some, that means going public. Square reportedly filed for privately for an initial public offering over the summer; Shopkeep is fast on its heels.

Shopkeep's IPO plan requires new talent such as John Baule, who joined the mobile point of sale provider this month as CFO after working for other cloud-based companies. He previously led ChannelAdvisor through its recent IPO.  

"Scale is like a chicken and egg thing," said Norm Merritt, president and CEO of ShopKeep. "The reason I joined the company was to take a product and scale it. Well, we'll double this year and we're looking for partnerships that will increase that growth rate…We need to make sure that we have the balance sheet to achieve what we have laid out."

Shopkeep didn't provide details on its IPO or its timing, but it's looking to bolster its financial position to add more merchant services to its payments acceptance.

"When we bring in new customers, that costs money," said Merritt, noting Shopkeep just raised about $60 million in Series D funding.

Baule's experience with "software as a service" companies will be particularly helpful, Merritt said. "He's been there, done that on the public offering side so he knows what it takes," he said.

The mobile point of sale market is, in part, suffering under the strain of its own success. After giving many small businesses simple tools for accepting credit cards, mobile point of sale providers now risk losing those merchants as their needs become more complex.

Square, despite its ubiquity, faces similar pressures. The company shuttered its consumer-facing mobile wallet and ordering apps in favor of rolling out a diverse range of merchant services.

Shopkeep has also been busy. In the past year it opened a call center, added processing through a March acquisition of Payment Revolution and formed an onboarding and account management team. The company has added a range of business services such as inventory and staff management, consistent with moves of other tablet point of sale businesses like Heartland's Leaf, which has an app store and an open development system. A partnership with MasterCard is enabling small businesses to accept EMV-chip cards.

"A small enterprise doesn’t want to go to a bunch of disparate suppliers to get all they need to run their business. We can become like an ERP for small businesses…the total heart of their business," Merritt said, adding Shopkeep's core mobile payments business gathers data that merchants can use for CRM and marketing. "We know who paid, what they bought and when they bought it."

Companies like Shopkeep have an opportunity to address a large share of a merchant's business management needs, said Richard Crone, a payments consultant.

"Merchants are coming to them and saying 'this is so easy to use for payments, can I use it for staffing, inventory control, table reservations and account management?'" Crone said.

However, mobile point of sale companies require the proper scale to manage the large number of businesses that want to sue their technology, Crone said, adding the right developer tools is also important.

"That's allowed Stripe to [do well]," he said. "Developers love their stuff. It's easy to use and that's what the developers communicate about."

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