A US federal judge recently ruled against Google, mandating that the company allow third party app developers to accept alternate payments which will erode Google’s 30% app store fee.
The same ruling will come after Apple as well.
And, hopefully, any platform that charges usurious rates for integrations.
This brings us full circle to the bastardized industry of POS.
Hosting a cloud POS costs real money, especially as the sprawl of digital transactions continues.
If you’re not monetizing the payment stream – meaning you have to transparently charge for your product – you’re not making dick, because merchants refuse to pay for anything, irrespective of value.
This has undeniably put certain retail vendors in a pickle: how do I offset this growing, non-trivial cost center?
A long time ago, Micros and NCR decided to “blaze” the trail and charge integrated vendors for the pleasure of the integration, undoubtedly driving third party solutions out of business.
Why?
First, because the amounts charged were often more than merchants would even pay.
In the mid 2010’s, prior to Oracle acquiring and actually fixing a lot of what Micros had screwed up, Micros would charge $50,000 for a SDK (this amount is disputed by a former Oracle exec but our data points differ.) On top of this, there were recurring “partnership” fees, levied as a per-store-per-month model.
Second, integrated solutions were served gag orders as part of the integration agreement and forbidden from telling merchants how much the integration fee would be.
This put integrated solutions in a precarious position: increase their prices by a staggering amount, or lose the merchant altogether. And since the CAC:LTV never pencils when selling anything to merchants unless you’re stealing from them, it’s a shitty place to be.
The entire dynamic turned third party integrations into a profit center, which is the antithesis of the “partnership” label that was clearly being misapplied.
As we dug into research for this article we found varying fees levied on integrated vendors.
It wasn’t clear if certain vendors received lower fees because they were grandfathered, negotiated more astutely, or were simply better liked by the party levying fees.
All that to say the numbers we post below aren’t 100% firm, because they can and do clearly vary quite dramatically.
We did reach out to all of the providers on the list. It’s worth noting that Fiserv and Toast neither engages nor responded for comment.
Our rationalization is that Toast is, well, Toast, and Fiserv is a large, legacy culture that struggles to understand anything software related.
In alphabetical order.
Fiserv Clover
| One-Time | Ongoing | |
| Merchant Fee | Not disclosed | Not disclosed |
| Partner Fee | Not disclosed | 25% of revenues |
Additional Notes: Fiserv was unwilling to share details of their programs.
NCR Aloha
| One-Time | Ongoing | |
| Merchant Fee | $0 | $0 |
| Partner Fee | Varies | Varies. If competitor (e.g. Olo), fees are < $30/store/mo |
Additional Notes: Under the old SDK, there was a ~$30K one-time fee and the partner was not allowed to disclose the fee to the merchant. There were also ongoing monthly charges per store. On the new cloud BLS platform, there is no partner fee since it’s easier and cheaper to support, so a large incentive is given to move to this preferred integration method.
Oracle Micros
| One-Time | Ongoing | |
| Merchant Fee | $0 | $0 |
| Partner Fee | $500 | Varies |
Additional Notes: The only pricing we publicly disclose is metered and payments, the metered pricing includes everything though – all API, all POS functionality – so not representative of the cost of an integration as it’s the cost of full POS https://www.oracle.com/industries/payg-services-price-list/
PAR Brink
| One-Time | Ongoing | |
| Merchant Fee | $0 | $0 |
| Partner Fee | $0 | $0.06 – $0.01 / API call |
Additional Notes: Of our ~300 integrations, there are maybe 5 partners that pay an integration fee, and it’s because they put us under a very heavy API load. The partner is not allowed to disclose the fee to the merchant.
Qu
| One-Time | Ongoing | |
| Merchant Fee | Not disclosed | Not disclosed |
| Partner Fee | $3,000 | Not disclosed |
Additional Notes: Qu does not publish its pricing publicly and as such there are likely wide ranges of fees. The partner fee came from existing partners.
SpotOn
| One-Time | Ongoing | |
| Merchant Fee | $0 | $0 |
| Partner Fee | $0 | < 20% of revenues; most are less (some are zero) |
Square
| One-Time | Ongoing | |
| Merchant Fee | $0 | $0 |
| Partner Fee | $0 | $0 |
Additional Notes: If the partner brings its own payments then there’s a fee schedule (1%) here
Toast
| One-Time | Ongoing | |
| Merchant Fee | $0 | $25/store/mo |
| Partner Fee | Varies, $3,000+ | Varies. < 25% revenues or per store per month fee |
Additional Notes: Toast was unwilling to share details of their programs. From talking with third parties, the partner is not allowed to disclose the fee to the merchant. Online ordering solutions remit to Toast 1% of the ordering volumes instead of the revenue share provision.
We now find ourselves in a place where POS companies that had never charged fees are starting to charge fees.
It’s also interesting to note the dynamics: NCR, who was perhaps the worst fee offender, has ceded its position to Toast.
It goes to show you that free market competition creates the right incentives if given enough time.
The problem arises when you have oligopolies that continue to increase costs when there are no viable alternatives.
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