United Bank Card Looks for Growth from New POS Product Line

At a time of rising business failures and intense industry competition, United Bank Card Inc. says its new Harbortouch unit is producing what the big independent sales organization sought?enhanced merchant relationships and higher margins. In addition to card processing, Harbortouch offers small and mid-sized restaurants and retailers business-management hardware and point-of sale applications under the Harbortouch brand for handling inventory, order and sales tracking, and related functions. Configurations differ depending on whether the merchant is a restaurant or retailer. Business services are more profitable for acquirers than straight card processing?whose margins are under pressure from intense competition?and give merchants more reasons to stay with their acquirers than if the relationship involved only payments. After launching Harbortouch early this summer (Digital Transactions News, June 24), Hampton, N.J.-based United Bank Card says 300 merchants are now using the service, and they generated about 60,000 transactions last month. UBC expects growth to ramp up for Harbortouch. James Surber, POS division vice president, predicts thousands of merchants will be using the system next year. “Absolutely we're meeting our expectations,” Surber says. “We think after the first of the year and the Christmas holidays, this is really going to take off.” Current Harbortouch merchants tend to be higher-volume businesses, he adds. UBC won't reveal financials, but says Harbortouch enhances its bottom line. “I would say that the margins are better because of the fact that this product takes the [merchant's mind] off of credit card pricing,” says Brian Jones, executive vice president of sales and marketing. “This product does so much more.” He also notes that Harbortouch gives United Bank Card's affiliated ISOs more reasons to sell UBC services. First Data Corp. with its POS Value Exchange was the first card processor to move in a big way into expanded merchant relationships with business-management applications, says payments researcher Adil Moussa of Boston-based Aite Group LLC. Besides First Data and UBC, another recent entrant in the field is Troy, Mich.-based ISO North American Bancard (Digital Transactions News, Nov. 11). Essentially, the processors resell management applications at a price that gives them a good return but still costs merchants less than using specialized POS systems such as Posera Software's Maitre'D line for restaurants or applications from Aloha Software LLC, Moussa says. “It's really finding a lower-priced solution and integrating with payments, and then you brand it as your own,” Moussa says. “It's definitely a way for the ISOs to pick up new revenue streams.” In a release, UBC said one restaurant in New Jersey was able to reduce its bookkeeping expenses and improve the productivity of its wait-staff by using Harbortouch. The system enhanced revenues by about 10% by identifying food items served during busy times but not priced correctly or even billed at all, the release says.