Is The Integrated POS System The Future Of Financial Services

There’s an old joke, told in many forms where one person asks for directions to a famous place, followed by the wrong type of direction.

“How do you get to Radio City Music Hall?”

“Practice.”

“How do you get to Harvard?”

“Study.”

And while we understand the current iteration of the Harvard version of the joke, it is our persistent hope that someday, inspired by the Innovation Project, the punchline to the question about how to get to Harvard will someday be “innovate,” or possibly “disrupt payments.”

Despite the fact the Innovation Project has literally been called  “Woodstock for payments geeks”  the staff at PYMNTS accepts that the site of the Innovation Project, the Harvard University campus, has been the nation’s pre-eminent hall of higher learning for more than 200 years, and that our dream is possibly a longshot. Especially since two of the biggest tech disruptors – Mark Zuckerberg and Bill Gates – famously dropped out of Harvard.

The visions of the future in commerce and payments on display at IP’s Innovator Expo in Harvard’s Science Center, on the other hand, are far from long shots. It would not be accurate to say that those who appear at the Expo are predicting the future as much as it would be accurate to say that the entrepreneurs and innovators who appear at the Expo are rewriting the road map to the future and by so doing, changing the shape of commerce as they do.

eThor, a 2014 Expo presenter and the winner of PYMNTS 2014 “Best Newcomer” award last year, and it’s CEO founder Gary Ziegler represent some of the new cartographers of the digital payments economy.

“We’re a point-of-sale  integration platform. We’re similar to a Stripe or a Braintree, but for POS integration at a physical store,” Ziegler explained. So if you have a mobile wallet or analytics platform or a loyalty platform that you need to hook into the physical store’s POS system you can hook into us and over the course of an afternoon be hooked into everything on our platform.”

Ziegler sat down to check-in with MPD CEO Karen Webster a little less than a year after the company took home the top new player prize at IP last year.  He says that the year following their coming out party at IP has been a strong one.

“The last year was absolutely the best year that we’ve had – I would say it’s been a transformational year for our company,” Ziegler enthusiastically told Webster. “I think when we met last year we had 500 companies and app developers that had signed on to our platform.  As of today we have over 2000 companies that have signed up. We’ve got a number of those that are live and we have some of the largest financial institutions in the world that are doing proof of concepts with us on different projects. It’s really evolved into a bigger company and we have a lot more opportunity right now that we did this time last year.”

Ziegler chalks that success up to two things.  One is just good old supply and demand, and being on the right side of that classic relationship.

“There was a pretty serious pent up demand for POS integration ranging all the way from a single developer trying to build an application that needs to hook into a POS and has no idea how to do that or no resources to make that happen all the way to credit card networks and the largest financial institutions in the world.”

The second special element that eThor brings is that ability to interface with a variety of POS systems and digital platforms – which can save both sides of those integrations a tremendous amount of grueling technical work.

“If you don’t have any experience it might take you 6-12 months to get it all working properly.”

And that, he says is true of businesses of all sizes.

“Even if you are a big player in the industry,  if you don’t have the expertise to do that we’re talking about, it can take years and years to get these integrations done,” Ziegler explained to Webster.

Zielger told Webster there is no secret to making these integrations easy, in fact they are always insanely hard, it’s just that their specialists have focused on this technical problem for over a decade.

“We hooked into the various POS systems and created a common data model which is the big part of the work. Ziegler went on to explain that across POS systems, a lot of the same data exists, but the architecture that organizes them, and thw amount of operability can vary greatly.  Some have full APIs, while others have only partials, in which case eThor has to go in and create the missing capacity.

“Micros for example has an API that allows you to push info to the POS system, but they don’t have way to pull information out.  If you can get Micros to let you in – if you can get that far which is itself actually a feet, but if you can get that far – they have 950 tables in their database.”

He also noted, still using Micros, that there are 4 different versions of their POS system, all with quirks, and hundreds on top of that offered by different vendors.  eThor he says, has just gotten good at working with many of them.

“What we do that is different that we have a lot more experience doing it and we know what we’re looking for,” he explained.

But what about the integrated payments players that are wrapping payments and other commerce capabilities into their terminals Webster asked – aren’t they all fierce competition?

Not really, noted Zielger, since in many cases it’s his company’s API that’s powering the integration side of their product, essentially freeing them from it.

“Some of them found out about us at the PYMNTS IP conference last year. And in the days after I got back, a lot of phone calls from people who had been doing their own integrations started showing up,” Ziegler told Webster. “What they were saying was  ‘we’ve done a whole bunch of these, we don’t’ want to do another one ever again.  If we can just use you, that would make our lives a lot easier.’”

And the reason why is simple said Ziegler. Unlike the folks at eThor, these people didn’t go into the business to do these integrations.

“It’s not their core competency.  It may be core to their business, but it’s not really the problem that they’re in the business trying to solve. They’re adding POS integration out of necessity, not because it’s their product.”

It is, however, eThor’s product, and one they are excited to bring to an increasingly large stage over the next year.  For his part, he thinks that what’s next for commerce and payments is going to be a big financial services pivot toward working at the point of sale, since he believes that is where the demand will be.

Echoing a theme we’ve covered before, for mobile payments to succeed, Ziegler told Webster, it has to be about more than the payment and instead about wrapping the loyalty program, the reward and the consumer data into a single package that advances the expereince.

“I think over the next 12-24 months you’re going to see more and more financial institutions introducing products that are built using our platform or a system like eThor.  I know that’s going to be the case because we’re working on it right now.  Any financial institution that’s not looking at POS right now and making it part of their strategy is going to be playing catch up in 12 to 24 months.”

Who will they be catching up to?  Well if eThor can pull off a 2015 that went as well as 2014, they will likely be catching up to the business and financial institutions that started following this start-up’s road map to the future a whole lot earlier.