Many of the big retailers have embraced Apple Pay as a payment option as the industry moves to more secure mobile payments. However, most small merchants have not upgraded their payment systems because of the cost. Now, Total Merchant Services, in concert with Apple, has developed a solution, the Groovv Terminal One. It's a small, easy to set up Point of Sale (POS) device with a low initial cost and can be purchased right in the Apple online store for under US$100. Small businesses everywhere are suddenly able to accept secure mobile payments.
Groovv Terminal One
The Mac Observer first heard about Groovv a few weeks ago and took the opportunity to chat with VP Scott Blum about this new product. What we found out was that a lot of thought had been put into making this Apple Pay POS terminal device a very Apple-like experience. Here are the notable features:
- The retailer buys the boxed package directly from Apple for US$99.95. It's called the Terminal One.
- After the rebate, the cost is essentially zero.
- The Terminal One accepts all payment types including Apple Pay and other contactless payments, EMV chip cards, and magnetic stripe cards.
- Total Merchant Services is also offering $20,000 free in transaction fee processing for the first year on payments made with Apple Pay when using Groovv Terminal One.
- It can be set up to work with the current banking partner, eliminating the need for a separate bank account.
- Transaction with Apple Pay are substantially faster than for swiped cards: a few seconds compared to as much as 20 seconds.
- The Terminal One works with conventional dial-up or with a router on Ethernet. It's small (18 x 8 cm) and light. A Wi-Fi version is planned.
- There is no contract, obligation or hidden fees.
Regarding the business model and how Total Merchant Services plans to make money on this project, Mr. Blum told TMO that the company is taking the long term view. In future years of merchant use, the small transaction fees will generate ongoing revenue. That's 1.69 percent + $0.15 for most swiped cards and 2.89 percent + $0.25 for rewards, business and AMEX cards. As an incentive to use Apple Pay, the first $20,000 in Apple Pay transactions have zero fee.
Mr. Blum also told TMO that his company worked closely with Apple's Apple Pay team to design this product to be incredibly easy to set up out of the box and get running. The packaging and instructions were especially designed to that end, and one can begin accepting payments in minutes, not hours. Customer service is available 24 x 7.
Why would a small to medium businesses be interested in this? The reason is that The EuroPay, Mastercard, Visa consortium (EMV), in an effort to stem credit card fraud and terminal hacking has been working for several years to develop more secure mobile transactions. That means new, more secure methods are being implemented. In order to promote the transition, after October 1, 2015, the liability for fraud shifts to those who don't upgrade their systems to comply with the more secure transactions using smartcards (EMV chip) and Near Field Communications (NFC) such as Apple Pay.
With the Groovv Terminal One, even the smallest merchant is enabled to conduct these more secure transactions, and this product should go a long way towards increasing the number of merchants who can accept Apple Pay. That's in Apple's interest and the motivation for this product. However, in recognition of the merchant and customer needs, the device, as mentioned above, is designed to work with all NFC contactless, encrypted systems.
Joe Kaplan, CEO of Total Merchant Services summed it up nicely. "We were ... able to create an intuitive user experience – something that merchants will certainly appreciate. And by enabling EMV chip acceptance, we take the burden of EMV compliance and the liability for credit card fraud off the shoulders of small businesses."