Boomtown Banks on a Boom in Calls for mPOS Help

The boom in mobile point-of-sale systems may have outstripped the ability of merchants and merchant-service providers to provide the hands-on support needed to keep the tablets humming.

That’s where a 7-month-old, San Francisco-based startup called Boomtown Inc. sees an opening. For a fee, it helps small merchants choose, install, network, and then maintain cloud-based mobile POS gear.

These can be bewildering chores for busy retail and restaurant managers who run one or a few locations but often lack technical expertise. And so far there hasn’t been much help.

“Traditional [value-added resellers] are focused on Micros and Aloha,” says Alfred “Chip” Kahn, a payments-industry veteran who founded Boomtown, referring to two well-known merchant POS systems. “[Independent sales organizations] aren’t technical, and they’re losing sales if they’re not out selling. So there’s this gap.”

A key part of Kahn’s business plan rests on the ongoing U.S. conversion to Europay-MasterCard-Visa (EMV) chip cards, which requires merchants to install new POS equipment by October to avoid liability for counterfeit card fraud. That task, too, can be outsourced to Boomtown.

“With EMV coming, no one has organized a technical labor force to be on site to make sure those implementations happen properly,” says Kahn. “We’ll take advantage of the rising [EMV] tide to get traction and adoption.”

So far, the startup is working with about 30 mobile POS (mPOS) vendors, says Kahn, including such brands as First Data Corp.’s Clover, Heartland Payment Systems Inc.’s Leaf, NCR Silver, Revel, Square, and Vend. He won’t be specific about how many merchant locations Boomtown has serviced so far, but says the number is “in the four digits.” The company has trained and signed on 350 technicians in 200 metropolitan areas around the country.

The service relies on an on-demand app. When a merchant needs help, he presses a button on the app to summon up a Boomtown technician on the device’s screen. The merchant can describe the problem, and the technician can engage the device’s camera to inspect cables and other equipment. In this way, says Kahn, “We can solve 80% of the problems in 20 minutes” without the need to send a technician. If that’s necessary, one can be dispatched within hours.

Boomtown can also remotely monitor retailers’ systems and alert clients of problems. Common snafus include networking issues and printers going offline, especially in busy restaurant kitchens, Kahn says.

Boomtown’s focus on merchants appeals to investors, which include Nyca Partners, founded by former Visa Inc. executive and Citigroup Inc. investment banker Hans Morris.

“Boomtown connects a cottage industry to people who need support,” says David Sica, a vice president at the New York City-based venture-capital firm, and also a former Visa manager. “We thought that was interesting.”

Under the company’s no-monthly-fee basic plan, merchants pay $1.50 per minute for remote support and $175 per hour for a technician to visit the premises. With the highest-value plan, which costs $49 per month, merchants pay nothing for remote support and the technician visit drops to $85 per hour.

Observers say Boomtown is filling a yawning gap created by a very young and fast-developing mPOS market.

“I really like the concept,” says Rick Oglesby, senior analyst at Centennial, Colo.-based consultancy Double Diamond Group. “It’s a big step above traditional online customer service, where you just hope for a response.”

—John Stewart