SMBs Get Into The Payments Groovv

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Total Merchant Services (TMS) has announced the launch of Groovv Terminal One, which the company is calling “a smart terminal payment solution for small and medium businesses,” available for purchase at Apple.

Joe Kaplan, CEO of Total Merchant Services, spoke with MPD CEO Karen Webster about the genesis of the product, the problems that it is designed to solve for SMBs in accepting new payment types … and what made it appealing enough to a company no less powerful than Apple to work with TMS.

KW:  Why did you decide to get into the market with a new product for small and medium businesses to accept payment?

JK:  There are millions of small businesses that use traditional terminals today to run their operations, but most of them aren’t ready to take the new payment types like EMV chip cards, which they have to be compliant with, and Apple Pay. The problem is that these small businesses don’t want to invest the money to upgrade their terminals, and many of them want a payment device and a process that’s familiar and easy for them.

We wanted to provide these small businesses with a smart terminal that enables them to accept all of these new payment types in a really easy, affordable and familiar way that also provides a great user experience. We call the terminal “smart” because of all those aspects as well as because of its ability to connect with POS devices so that they can upgrade their businesses and keep our processing solution, so we can grow with them.

KW:  The other thing that I think makes this particular offering special and unique is that you worked with Apple — certainly that is something that gets everyone’s attention. What attracted Apple to work with you?

JK:  Apple wants to reach the small business segment and enable them to accept Apple Pay and encourage their customers to pay them with Apple Pay. We’re experts in the small- to medium-size merchant segment; that’s where we really concentrate. In our 19 years of existence, we’ve provided over half a million small businesses with their payment needs. We’ve also developed a great product experience for Apple, with a great value proposition for their small business customers.

KW:  You mentioned the reluctance that these small businesses have in upgrading their terminals. I think EMV has certainly put the proposition front and center; many of them aren’t entirely sure they need to be worried about it.

Are a lot of small businesses thinking that the big driver is to enable these new payments that they perceive consumers will be walking in and wanting to use to buy things from them?

JK:  For the first time in this industry, payments availability (or lack thereof) is really driving the transaction for consumers. If a merchant doesn’t have the ability to accept a transaction in the way that a consumer wants to spend, they are going to lose out on sales more often, now.

KW:  I think that’s right. Do small businesses realize that?

JK:  They don’t realize it until it happens — and it’s happening more and more.

The realization is occurring for merchants in their own consumer behavior: If they want to use Apple Pay, for instance, and they go to a store and it doesn’t have the ability to accept Apple Pay, at some point, they get aggravated with that and they might stop going to that store because they want a better user experience themselves. Maybe they don’t like sticking the chip card into the terminal because it takes too long and they’d prefer the expediency of an NFC transaction. Their frustration will cause their own patterns to change as a merchant.

KW:  That’s interesting; I’ve heard many people comment that the move to mobile may in fact be accelerated by the switch to EMV, because we’ve become so used to a faster experience at the point of sale. EMV is a slower experience, and it just seems different.

In a lot of situations — QSR, food service — where moving people through the line quickly is important, that may in fact be enough of a prompt to get small businesses to pay attention.

JK:  EMV was definitely the greatest invention for NFC.

KW:  Give us a sense of some of the other capabilities, beyond processing payments that Groovv offers.

JK:  In addition to accepting all the payment types, we lead the industry in affordable pricing and enabling businesses to receive free Apple Pay — they can accept Apple Pay and have the processing fees waived for the first year, so that’s very compelling. We also give a $99 rebate, so essentially we give the terminal away for free.

We have also created an instant activation feature that enables a business to start accepting payments in minutes. It’s the first of its kind process for terminals.

Additionally, we’ve developed the Groovv API through which we’re enabling software developers to have an easy solution to integrate to an EMV device. Integrating to a compliant EMV device with software applications can be a really long and tedious process due to all the stringent EMV and PCI requirements. We’ve changed that by encrypting sensitive card data at the terminal and keeping EMV and PCI compliance out of scope for the POS providers and all the apps.

It’s really easy to implement; we have a dedicated staff and online tools available for that process. In addition, we have revenue sharing programs for software developers to create additional revenue streams for their business.

KW:  Do your merchants fall into any particular categories?

JK:  We’re across the board in every SMB segment that’s able to accept a credit card.

KW:  Working with Apple must have been a really interesting experience. Are there any lessons that came out of the experience that you think are worth sharing?

JK:  Apple is an extremely innovative company — the most innovative company in the world. Working with them to create an incredible user experience, from the design of our product package to our instant application process, really was an interesting endeavor. The input that they gave us to be able to do that was like an MBA class.

To download the full version of the podcast, click here.

Joe Kaplan, CEO, Total Merchant Services

Joe Kaplan is a proven leader, with a 20-year career in the payments and finance industries. He is currently the CEO of Total Merchant Services. Before joining Total, Joe was the founder and CEO of Innovative Merchant Solutions and Innovative Gateway Solutions, which were both sold to Intuit, the makers of QuickBooks and Turbo Tax, in 2003. Mr. Kaplan worked at Intuit as President of their Payment Solutions Division until 2009. Over this six-year period, the division maintained an annual growth rate of 60 percent and generated over $350 million in revenue. Joe attended UCLA and Whittier Law School. Throughout his career, Joe has been recognized and rewarded for his industry leadership. In 2008, he was elected the President of the Electronic Transactions Association (ETA), and was also awarded Ernst and Young’s Entrepreneur of the Year Award and ETA’s 2007 Distinguished Payments Professional.