ShopKeep POS, a small start-up ISO, may help change the payments landscape. About 3,000 merchants use its cloud-based point-of-sale system that’s supported by Apple iPads and MagTek mobile card readers.

The New York-based ISO is capturing the attention of companies big and small. Earlier this month, it worked with PayPal Inc. to test that company’s mobile-payment system at a movie festival, and recently it announced plans to integrate with two other mobile-payment systems, Dwolla and SCVNGR’s LevelUp.

With Dwolla, ShopKeep POS brings merchants a low-cost payment option, and LevelUp offers point-of-sale payment acceptance but charges a fee only when customers use earned loyalty rewards.

So what makes ShopKeep POS so attractive? Its size, according to Dwolla representative Jordan Lampe.

“What you’re seeing coming out of these disruptive startups is quicker, more direct access and a more powerful feedback loop,” he says. “With the entrenched players, their size makes it harder for them to listen and incorporate that feedback.”

ShopKeep is one of many companies to tap into Dwolla’s application programming interface. In many cases Dwolla isn’t aware of the integration, but it plans to work with ShopKeep, Lampe says.

“They’re integrating Dwolla into their service to provide merchants added value,” he says. “What’s different is we’re taking on a more proactive role to see what the market needs.”

Chrisina Dorobek, LevelUp vice president of partner development, says having mutual clients led her company to work with ShopKeep. The companies have 30 to 40 merchants in common.

ShopKeep will integrate LevelUp and Dwolla, with one available by the end of this year and the other by early next year, says Jason Richelson, the frim’s CEO.

ShopKeep plans to “beef up” its application to accommodate bar code scans, which LevelUp uses for payments, Richelson says.

For merchants, the integration will clean up countertops and alleviate the need to enter payment information on separate devices, he says.

ShopKeep also plans to integrate with other payment types, as well as loyalty systems, daily-deals, marketing and gifts, Richelson says.

Today, ShopKeep’s customers are split evenly between retail and simple quick-service merchants. It plans to venture into the restaurant/bar market and heavier volume quick-service food providers in the next few months, Richelson says.

“We’re seeing a drumbeat here,” says Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC. Software-based payment systems are “opening up new payment opportunities like Dwolla, and it’s putting pressure on every one of the existing players.”

The first companies to feel the impact will be providers of electronic cash registers, such as NCR and Micros, Ablowitz says. Cloud-based processing through an iPad or iPhone is a compelling offer for a retailer upgrading a point-of-sale system, he says.

“Over not very much time we will see new players compete with the Microses and NCRs because it’s such a low barrier to entry with cloud-based technology,” Ablowitz says. “They might be targeting small merchants now, but you will see some of these companies enter the middle and upper markets, and that will put pressure on Micros and NCR because the price tag is so much lower than the old cash register-style systems.”

Ablowitz sees less impact on stand-alone terminal companies such as VeriFone Systems Inc., whose GlobalBay mobile service similarly uses iPads to help merchants process transactions.

 

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