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Mobile point-of-sale systems have come a long way in a short time, but in one respect they may have grown up too fast. They may have outstripped the ability of merchants and merchant-service providers to provide the kind of constant and consistent support that’s necessary to keep the tablets humming.
That’s where a 6-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 point-of-sale gear.
These are 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 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,” Kahn tells Digital Transactions News. “That’s part of our thinking, too.” EMV can get the company in the door, where it can then market its mobile expertise, Kahn figures. “We’ll take advantage of the rising [EMV] tide to get traction and adoption,” he says.
So far, the startup is working with about 30 mobile POS (mPOS) vendors, says Kahn, including such brands as First Data Corp.’s Clover, 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 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.
Kahn’s shorthand description for Boomtown is that it is a cross between Uber, Geek Squad, and Amazon Mayday, the Amazon.com Inc. service that also relies on local devices to diagnose problems. But, he adds, the company is “not doing technical support for offices, and we’re not doing technical support for homes. This is merchant-focused.”
That focus has appealed 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.” It also helps that the country is moving to EMV, he adds, which should increase the demand for Boomtown’s service.
Meanwhile, Boomtown is working to train that “cottage industry.” It hires only one technician for every 100 it interviews, Kahn says, and then puts them through background checks and training courses on how mPOS systems work. So far, it has signed on 350 technicians in 200 metropolitan areas around the country.
The rigorous approach is necessary, says Kahn, who 10 years ago founded Denver-based payments-platform provider IP Commerce Inc. “We’re solving for businesses not updating their technology” for lack of expertise in installation and maintenance, he says. Even in cases where merchants install the gear, it often goes on the shelf once something goes awry. “There’s a huge inactivation that happens,” Kahn observes.
Under the company’s basic plan, which has no monthly fee, 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.”
