For a company that has manufactured point-of-sale terminals in the UK since 1989, Thyron Systems Ltd. admits it has done so in a fairly quiet manner.
But it feels it needs to shout about its PostMate Smart pocket-sized mobile terminal designed for micro-merchants seeking to accept card payments.
"We haven't talked about our company much, but there are a lot of companies out there making a lot of claims about their mobile products," says Michael Ault, managing director of Thyron Systems. "We are tiny compared to VeriFone and Ingenico, but we have been quick to address the micro merchant sector with the PostMate Smart."
Watford, U.K.-based Thyron saw small merchants and banks in the UK get interested in mobile card acceptance when Square Inc. introduced its card reader in the U.S. in 2010, Ault says.
"It would be wrong to suggest that we spotted the potential for mobile terminals years ago when Thyron first started, but we certainly saw it in the UK a couple of years ago based on merchants' interest in Square," he says.
Among various other products, Thyron sells two models of the PostMate to acquiring banks, which in turn provide them to their merchant customers. About 95% of micro merchants using Thyron products opt for the model utilizing Bluetooth connectivity technology, rather than the model that operates on the 2G or 3G cellular communication global system, Ault says. Bluetooth lets users exchange data over short distances, making it appealing to merchants operating a mobile terminal.
Thyron makes money only from selling the terminals to banks or independent sales organizations, but as market economics change, the company may add some transaction fees, Ault says.
But that's not likely at the moment, considering the company's concentration is on terminals for micro merchants, or those who have traditionally accepted only cash in the past and don't ring up numerous high-value transactions on a daily basis, he adds.
The target market of micro merchants has also kept Thyron from exploring too heavily into contactless or Near Field Communication capabilities on its terminals, which do accept the chip-and-PIN smart card transactions common in the UK, Ault says.
"NFC and contactless has had a slow take-up in the UK, and we just haven't seen demand for it," Ault says.
Micro merchants need inexpensive terminals, and features such as NFC add to the cost of the hardware, Ault says.
Small merchants "are not interested in contactless at this time, and to be honest, many of them would not have sales of the low value acceptable for contactless," he says.
Thyron plans to expand its market throughout Europe in 2013, and would entertain a move into the U.S. market if a "channel partner" made a business case for such a move, Ault says.
The company plans to test a mobile terminal about half the size of its current models in 2013, Ault says.
"Merchants don't really want their payment terminal to look like a mobile phone," Ault says. "The consumer is more reluctant about security if it looks like they are just swiping their card data onto someone's phone."
The major issue for Thyron now is pushing banks and payments processors to more quickly establish a merchant account when a micro-merchant applies for one, Ault says.
The on-boarding process for traditional acquirers can take several weeks, says Zil Bareisis, a London-based senior analyst for research firm Celent.
"But many of the new players in payments can do instant underwriting and on-boarding," Bareisis says. "I don't think it's just a problem in the U.K."
Reducing the time it takes to accept a merchant account, along with more transparent pricing, represent the main factors in how Celent "expects the mobile POS industry to carry more impact on more traditional acquiring," Bareisis says.