New POS Tools Give Retail Payment Processing A Boost

About a year ago, CAM, a commerce solutions company based here, developed software that ties to a payment processor aimed at improving retail payment processing for its customer base of 10,000 small and midsize traditional and Web retailers. The result is X-Charge, CAM's newest credit-card processing software, and Retail Star, an integrated POS payment-processing solution.

"Making it all integrated into point of sale is the way to go, but people have avoided doing that because the packages out there have been problematic," said Geoff Knapp, CEO of CAM.

In the past, payment-processing software was impossible to keep up to date because of the difficulty in working with a variety of different processors sitting in the middle of retailers' systems, Knapp said.

"We decided to work with one processor and develop software that works really well with that one processor," he said. "We're now generating over $1 million a year in payment-processing fees, which is recurring in nature so it's an asset you can build up."

CAM, a publicly held company with about 200 employees that does about $20 million in sales, has been around for 20 years. Until now, the company mostly sold hardware and software directly to SMBs. CAM now offers commerce solutions, including inventory management, POS, sales transaction processing and accounting. Solutions include hardware, installation, training, service and consulting.

CAM's new systems sales have declined, but overall sales are up slightly. To build upon the success of its new products and solutions, CAM recently recruited 10 reseller partners for its X-Charge and Retail Star lines.

Knapp said CAM is offering resellers discounted software and 30 percent of the recurring payment-processing fees for referring the customer.

"They sell the software, make high margins on that and refer the business to us, and we quote them a rate and get them set up on the payment process," Knapp said. "All the reseller does after they make their margin is cash the residual checks for the money they are making."

CAM's X-Charge credit-card processing software, designed for Windows 95/98/NT and Windows 2000, can be used as a stand-alone credit-card terminal or integrated with existing POS applications. The software handles transactions including sale, credit, return, void and check services.

The X-Charge software is network-ready and produces reports including transaction detail and type, credit-card type summary and settlement summary. Knapp said debit-card and gift-card features will be added within the next few months after several customers requested the feature.

Retail Star is the solution offered in a 32-bit Windows application, which utilizes programming tools from vendors including Microsoft and Inprise. It uses a SQL database and allows users to access data through third-party programs. It features object-oriented programming and design, so it can be modified and enhanced.

Knapp called the program a unique retail POS opportunity for resellers and a way for his company to test the waters as it moves to grow its new business model beyond payment-processing solutions.

"It's a good way for them to get to know the company as we begin to offer more opportunities for other products," Knapp said. "It's a brand-new program, and we are working to be careful about channel conflict."

CAM is also recruiting new customers with Retail ICE, a single-user version of Retail Star. Knapp said CAM ships about 6,000 copies of the software per year hoping small retailers, particularly those poised for growth, will latch onto the software and stick with CAM for payment-processing solutions.

"Selling software and hardware is brutal, and there is a lot of competition," Knapp said. "It's such a difficult market that if you have to sell new hardware and software, you'd better find a way to build recurring revenue."

While CAM generates about $5 million in revenue from services, Knapp said the payment-processing solutions and new reseller program constitute a new recurring revenue strategy and business model that's beginning to pay off for the company.

"It's the best business model we've ever had as a company," Knapp said. "These recurring revenue opportunities are what's going to allow people to survive in a difficult business."