Keeping up with regulatory requirements and maximizing the types of payment methods accepted can be burdensome for merchants, who often opt to use multiple POS systems to manage it all. Here’s why you shouldn’t.
Why Merchants Use Multiple POS Systems
Merchants are often racing against time when it comes to the technology they use to process payments. Rapid technological advancements along with changes to federal and state regulations can make it difficult to stay a step ahead of trends in payment acceptance.
One example is the evolution of government assistance programs like SNAP and WIC. In 2004, the government replaced “food stamps” with electronic benefits and debit cards, marking a massive change for merchants that accept these benefits. While the use of Electronic Benefits Transfer (EBT) cards made issuing benefits easier and aids in reducing fraud, it also meant merchants that wanted to accept EBT payments had to make some changes to their own POS systems. Merchants who are new to EBT acceptance also face challenges when it comes to choosing an EBT POS system.
In many cases, merchants choose to augment their current POS with an EBT-capable system, essentially using two systems to do one job. One rationale for doing this is to follow the rigid reporting requirements of accepting SNAP benefits. Merchants know that SNAP eligible and ineligible items must be separated, and that State and local taxes cannot be included on SNAP-eligible items. On the surface, it might appear easier to simply run eligible items through a separate POS system.
Unfortunately, using multiple POS systems often results in double the headache—and double the cost. We look at why multiple POS systems can hurt your business more than you think.
How Multiple POS Systems Negatively Impact Business
The ability to accept EBT payments has many benefits. In addition to broadening a business’ customer base, it can increase revenue, and allow merchants to better serve the community. That said, merchants that opt to leverage multiple POS systems to get the job done may actually be doing their business a disservice and negating many of these benefits. Let’s look at why.
Costs Add Up
Using multiple POS systems gets expensive, though the costs aren’t always so obvious. Hard costs are easier to get a handle on; there is the cost of separate POS hardware and software. Two POS systems means multiple card readers, tools, and software that can be expensive to implement, maintain, and upgrade when needed. In some instances, fees will differ for each, which can complicate accounting. Merchants should also consider the costs of training employees on two different systems.
Then there are the less tangible costs: time lost navigating two separate systems to gather the necessary information for the complex recordkeeping requirements of SNAP, lower efficiency in the check-out process, lost counter space, increased potential for fraud, and complications in compliance. These decreased efficiencies can negatively impact the bottom line.
Double the Hardware, Half the Efficiency
When merchants double up on POS systems, they also face double the number of considerations, which can make accepting payments less efficient and hurt the customer experience. Multiple cash registers, card readers, and software systems can impede employees’ ability to check out customers quickly.
If a merchant’s legacy POS system is old, has poor customer support, or is tied to a disreputable vendor or reseller, it may be extremely difficult to properly integrate a new POS system on top. This can have significant ramifications and make accurate reporting nearly impossible. Worse yet, if your legacy POS system suffers an outage, you will only be able to process EBT payments, cutting potential sales dramatically.
Security & Compliance Headaches
Managing multiple POS systems mean you have increased fraud and security concerns. Not only does each system need to meet all PCI-DSS compliance standards, but each should be EMV-compatible, have up-to-date antivirus software and have secure user permissions. Other considerations that may require double the effort include:
- Using a secure password for each POS
- Maintaining a secure and encrypted WiFi network
- Training employees on securely accepting credit card payments on each POS
- Securing customer payment card data
- Implementing fraud prevention tools and measures for each POS
Since SNAP benefit acceptance has specific reporting rules, merchants must also consider how to accurately report via two separate POS systems. This may require significant manual input, which is not only time-consuming but prone to human error. This is a step that cannot be overlooked; violating the rules of SNAP acceptance can result in fines or disqualification from the program.
Conclusion
For merchants that accept EBT payments, replacing a legacy system with an all-encompassing, simple new system is the best bet. This can eliminate hairy situations that arise when your old POS system has issues and can reduce inefficiencies in payments processing and the overall checkout experience.
Novo Dia Group’s TotilPay products, previously called Mobile Market+, enables merchants to easily process debit, credit, SNAP, and WIC, cards—all from a smartphone or tablet. Our application is designed to enable small, independent merchants and mobile businesses to easily and securely accept all forms of payment from one device. Merchants that want to avoid the hassle of operating two separate POS systems can find an all-in-one solution in TotilPay.
In addition to ease-of-use, merchants that use TotilPay enjoy:
- The ability to email, text or print receipts.
- GPS functionality support to enable location services for tracking activity.
- A small footprint with the ability to operate with no power.
- A portal to view transactions and online receipts.
- The ability to remotely disable devices.
- Email notification for out of state transactions.
Contact us today to learn how we can help you streamline payment acceptance for your small, non-traditional business or farmer’s market.