After two years of getting its footing in the U.S. and South American markets, Poynt is ready to expand into Europe.

The Palo Alto, Calif.-based POS provider is working with acquiring partners Elavon and Wirecard, targeting merchants of all sizes with the terminal Poynt designed to be future proof.

Poynt developed its app-based payment terminal in 2014, predicting that the concerns over EMV upgrade costs would lead to interest in a terminal that could handle future upgrades through software. Poynt founder and former Google Wallet and PayPal exec Osama Bedier figured an app-based terminal would resonate with the masses.

Poynt launched its Smart Terminal in the U.S. in 2016. After that, an arrangement with Itau Unibanco in Brazil presented itself, and Poynt focused on that market for the past nine months. Its next step was to line up allies in Europe.

Harsha Krishnappa, head of international business for Poynt
Harsha Krishnappa, head of international business for Poynt

"We've been working on partnerships in Europe over the last four or five months," said Harsha Krishnappa, head of international business for Poynt. "Much of it was prompted by the interest in our products and Elavon (through U.S. Bank) being an important acquirer for us in the U.S. and also having a footprint in Europe."

Poynt considers its timing to be right for expansion into Europe, having first focused on merchant relationships and the quality of the Smart Terminal in the U.S. and South America.

"The Europe market is just as large as the U.S., but it is a little more fragmented, with many local debit card schemes," Krishnappa said. "There were many more certifications and processes we had to go through to prepare."

In the meantime, other companies have traveled a similar path as Poynt by establishing POS products that can download apps to support the business or provide value-adds to customers.

Last year, Germany-based Aevi entered the European market with an Android-based payment terminal called "Albert," set up for merchants to accept various payment methods and applications tied to specific businesses.

U.S.-based Verifone also participated in this trend, introducing the dual-screen Carbon POS with a cloud-based Commerce Platform meant to aid in marketing campaigns and other use cases.

The Poynt Smart Terminal has a dual touchscreen and handles payments via mag stripe, EMV, Near Field Communication and QR codes. The Poynt App Marketplace allows merchants to plug in to pre-order capabilities, employee time clocks and accounting functions.

Poynt generated some interest in the U.S. market and, through Elavon, distributed terminals to Costco retail warehouses. Though it has delivered 100,000 terminals to merchants, Poynt will remain locked in a crowded market that most POS developers find difficult to mount meaningful penetration into a landscape dominated by Verifone and Ingenico.

"Although Poynt's product design is attractive and Osama Bedier has a good reputation in the payments market, the task of penetrating the POS market is very difficult," said Gil Luria, director of research for equity capital markets at D.A. Davidson & Co. "Both traditional POS companies such as NCR and Oracle's Micros have similar integrated products, and payment terminal companies such as Verifone and Ingenico have introduced their own offerings."

The terminal companies sell millions of units a year and the POS companies sell tens of thousands of units, Luria said. "That means they have significant scale in manufacturing and distribution that are very hard for a new entrant to match."

Though a daunting task, Poynt remains confident it can continue to carve out its niche in the POS market.

"With this launch in Europe, we essentially have decided to go international and we will have announcements about other markets soon," Krishnappa said. "We're very excited about this new geography in Europe and the acquiring partners' merchant bases."

Matrix Partners, Oak HC/FT Partners, Stanford-StartX Fund, Webb Investment Network, Nyca Partners and Google Ventures continue to support Poynt.

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