A growing number of brick-and-mortar merchants want more from their point of sale systems than basic payment processing.

Instead of just a terminal, today’s POS is packed with software applications that enable store owners to manage their entire business on the same device they use to accept payments

A number of factors are driving the surge in integrated payments.

Hardware costs are coming down, especially since the introduction of tablet systems.

At the same time, tablet technology is making integrated POS systems more readily available to merchants who couldn’t afford a sophisticated system in the past.

There’s also been a huge software development boom in retail. Software exists for just about every retail segment now, from dry cleaners to hair salons.

And the skills of merchants and consumers have both advanced now.

Features once considered high-end are starting to move down to the cheaper software packages.

Many of the simpler POS systems are starting to adopt software features formerly thought of as high end. Capabilities like loyalty, customer tracking and analytics are starting to appear in the cheaper software packages, observers said.

It used to be that an integrated point of sale terminal loaded up with features was too complex, expensive and excessive for the small merchant.

Now with the advent of tablet-based systems, the integrated POS is becoming much more approachable, more affordable and more relevant.

“We’re seeing more and more of a proliferation of integrated payments,” says Shelley Plomske, vice president of product at Total Merchant Services, a Woodland, Calif.-based super ISO.

That’s true among smaller merchants. Plomske noted that 2 million merchants have standalone terminals, and 3 million more use cash registers. Those merchants are beginning to use at space is tablet-based systems, she says.

In the past POS systems cost tens of thousands of dollars, but an integrated system today might set back a merchant by about $50 a month.

“Merchants aren’t so scared anymore. They don’t have to buy a $50,000 Micros system,” Plomske said.

Total Merchant Services’ target market consists of smaller merchants–owner-operator merchants with $10,000 to $15,000 in monthly transactions–the kinds of businesses that don’t have their own in-house experts to pore over sales records.

“What tablet-based technology is doing is giving them visibility into what they’re selling in a way that’s very easy to consume,” Plomske said. “They don’t have to be analysts or controllers to really understand what’s selling.”

This past year, UP Solution, the POS arm of United Merchant Services in Hackensack, N.J., extended its reach into the tablet-based POS market with its UP Tab product line.

For some of the merchants UP Solution sees, upgrading from a cash register to a tablet-based POS is all about creating a countertop aesthetic and a more interactive payment experience for the consumer, said Dan Dufault, vice president of sales and marketing for UP Solution.

“Tying the front to the back office is good. But being able to engage customers is what’s really compelling,” he said.

Exactly which features merchants want at the point of sale depends a lot on merchant type. For restaurants, it’s all about turning tables. That’s why many of them rely on integrated systems and can’t afford to live without them, says Jared Isaacman, CEO and founder of Harbortouch, the POS division of United Bankcard Inc., a super ISO based in Hampton, N.J.

The system helps restaurants assure a more accurate and timely order. Then, it gets customers out so that someone else can come in and sit down.

“If you go to a restaurant or bar that doesn’t have a POS, you can watch the waiter or waitress have to had everything up with a calculator. It eats up time. And revenues correspond to the number of people going in and out of a table in a night,” Isaacman says.

For retailers, it’s all about inventory management, followed by customer loyalty. Retailers have a finite amount of available capital. So if they’re going to have a product that sits on a shelf for a long time, or gets stolen, they need to account for it, Isaacman says. For instance, if a liquor store sees that Budweiser didn’t sell well on the Fourth of July, they’ll want to adjust their inventory accordingly the following year.

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