There are many new, particularly cloud POS entrants globally. And why not? Software is easier to build and support, upfront costs are lower for merchants, and hardware no longer requires direct ties with the Asia. But would it surprise you to learn that many of the cloud POS companies abroad are working their way to the US market?
We thought we would share some reasons why we think this is happening.
First, capitalism works. What? Yes, capitalism works. The EU and many other parts of the globe have placed limits on the fees that the credit card ecosystem can charge. While there’s probably nobody more vocal about the pittance of value exchanged for shelling out 3% to the payments mafia, the commercial implications are actually pretty important.
When new POS companies have needed to distribute their products in nations with capped fees, they find that there’s an uninterested distribution channel in payments. Why do more work if there’s little commercial incentive? This means that they instead must raise capital or charge more for their products. In turn this means there’s lower appetite from potential customers. These are the side effects of bad policy; if the people writing policy were employable in private industry they might be forced to learn how markets function.
Second, the US has the greatest infrastructure for technologies like cloud POS. Reliable power. Ubiquitous internet. Next-day shipping. This makes cheaper solutions like cloud POS much more likely to work. When that happens, customers are more likely to stick around, reducing churn.
Lastly, the US is a big ass market. There are so many at-bats on any given day that winning just single digit percentages will eventually result in a really big company. You might saturate a much smaller market but then you’re constantly exposed to competitors. In the US you can be trivial by market penetration standards and still thrive.
Don’t be surprised if you see a growing number of POS systems from abroad on countertops across the country.
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