Often times third parties suffer at the whim of POS companies. Well, we invited them to turn the tables on their POS overlords and rate the openness of the POS companies in (mostly) US hospitality.
The scope of this survey was limited to software integration and had nothing to do with payments or hardware options, and that would require a whole other matrix.
Why does openness and accessibility matter?
Merchants don’t often realize the limitations of the POS they selected until many months after the system has been implemented. The story pretty much reads the same:
- Merchant is pumped about their new location, selects a POS and has it installed
- A few months in the merchant realizes third party tools can fix some of the location’s problems as, surprise, the POS can’t do everything well
- The merchant discovers that they need to integrate the third party tools into their POS to move data back and forth
- The third parties say the POS refuses to integrate or will pass along massive fees, the POS company blames the third party or says nothing, and the merchant get screwed while action dithers
So this ranking will attempt to address some of this concern upfront. Because the reality is that merchants seek to own their POS systems for a long time.
And if that’s the case, the cost of integrations need to become part of the total cost of ownership (TCO) equation for POS.
If POS companies are charging you $30, $40, or more per third party integration per month, that’s a pretty non-trivial cost when you realize you need to rely on several third party solutions to augment your POS.
Here’s a quick table to show you what we mean. Assume you run a business with 2 terminals at $80 per month each and your POS charges a 30% (or $30) fee per month per third party integration. You use three third party solutions: labor, loyalty, and inventory.
You’ll see the differences in costs are pretty substantial – a 20% difference actually. We’ll bet that you didn’t consider that cost differential when you were initially comparing prices for your POS, did you?
This is why it’s critical to know where your POS solution stands against others, and which prospective POS companies might have a higher TCO than you initially thought. In that vein we asked third parties to rank the difficulty in integrating with a POS company. Often times difficult integrations mean high costs for the merchant. Here’s the third party rating methodology:
- Each POS company was put into one of four categories: Legacy Closed, Legacy Open, Modern Closed, and Modern Open
- Third parties were asked to rank each POS company one a scale of 1 to 5, with 5 meaning they strongly agreed with the category the POS was placed in, and 1 strongly disagreeing with the category
- Some of the POS companies on our list only gathered a few rankings, meaning that few of the third parties had integrated with them. This is likely a general indication of smaller installation bases. Thus the ratings for smaller POS companies may be biased due to fewer ratings
We’ve given each POS a mean rating in parenthesis. We’ll also produce a graphic to show how they stack up visually then offer our analysis.
Legacy Closed
- Aldelo (4)
- Aloha (3.9)
- Dinerware (3.5)
- Digital Dining (4.2)
- Maitre’D (3.2)
- PC America (4)
- Posnet (5)
- Squirrel (3.2)
- Wand (5)
- XPient (3.6)
- Zonal (3)
Legacy Open
- Focus (4.2)
- Future (3)
- Micros RES (3.8)
- NCC (4.5)
- POSitouch (3.9)
- Restaurant Manager (4.8)
- Revention (2.4)
- RPower (2.2)
- Speedline (1)
Modern Closed
- Cake (3.7)
- Lavu (2.7)
- Lightspeed (2.8)
- MobileBytes/HRPOS (3.8)
- NCR Silver (3.9)
- Toast (2.1)
- Upserve (2.8)
- Vivonet (5)
Modern Open
- Aldelo Express (2.5)
- Appetize (3)
- Brink (4.7)
- Clover (4.4)
- Linga (3.5)
- Harbortouch (3.5)
- ePOSnow (4)
- Micros Simphony (2.8)
- Northstar (4.3)
- Poynt (4)
- Qu (4.2)
- Revel (4.3)
- Salido (3.5)
- Square (3.2)
- Talech (4)
- TouchBistro (3)
Now the graphics. We colored the average line red. Companies with values that are higher (i.e. visually below) than the average line are those that likely belong in the category while those with values lower than the average line (i.e. visually above) might not.
For starters there’s nothing keeping these POS companies in their current positions. Some could invest in opening their APIs while others could add fees or make integrations more challenging – so view this as an amorphous ranking and akin to a snapshot of POS companies today.
Some of the companies end up in Open categories even though they charge hefty fees: think Square, Clover, and Toast, which while slotted in the Modern Closed category scored well enough that they might be put into the Modern Open category instead.
It’s also important to note that not every API is the same. For example, some POS companies have great APIs for reading data, while others have better APIs for writing data. Square is only open in very specific ways as is Toast: Square is not open to any influence over how they integrate to third parties while Toast is very against anything running on their tablets. The larger POS companies (Micros, NCR) generally support more functionality as a relates to ordering, payments, coupon redemption, different ways to earn loyalty points, and kiosk integrations with mature APIs to handle multiple processors and gift card providers.
Many of the cloud POS companies don’t support true integration for in-store products that need integration, like loyalty, kiosks, and others. “I think many of the cloud POS companies designed their APIs around things like online ordering. When we talk about in-store, on-device integrations, they all balk, but the problem is cloud is too slow to really be efficient in an order-at-counter flow. Makes it an uphill battle for us, but we are slowly convincing them to let us pilot our integrations on their devices,” shares one third party.
We were surprised to see Micros RES perform so well on the Legacy Open ratings. Micros come a long way over the past few years and it’s especially surprising given that Oracle is known to be a bit of the Death Star for innovation. However, our personal conversations with Micros post-acquisition would definitely corroborate this overall rating, especially when juxtaposed to NCR. Still, it was odd to Micros Simphony rate poorly in the Modern Open category while RES did relatively well.
In our view the most important trend to watch will be what happens to the POS companies in a payments portfolio, which collectively now represent roughly 20% of the market (though we expect that marketshare to dwindle absent material investment in their POS products).
Global Payments, which owns Dinerware, Digital Dining, Mobilebytes, and PC America seems to be headed in the wrong direction. 3 of 5 of their POS solutions are already below the accessibility averages in their respective categories and our first hand experience would not contradict this. How is is that Mobilebytes, a cloud POS that was previously open, ranks almost as poorly as NCR Silver now that it’s owned by Global? This might be a harbinger of worse to come. Global wouldn’t comment on the matter, and as we preach around here transparency is often a leading indicator of culture and long term success for innovation.
Contrast that with Shift4 who has actively invested in a universal API and will be moving Future, their laggard POS performer according to these accessibility ratings, in a more open direction following management changes.
There are lots of ways to poke holes in the ratings, but it’s more data than you had. Hopefully that sparks conversation one way or the other. And remember, you must consider the difficulty of integrating to a POS system in your TCO calculations going forward.
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