When you choose POS software, you are often also choosing who processes your payments. With some systems, that choice is made for you. The software and the payment processor are bundled together, and the rate is set by the vendor. At Tower Systems, you keep the freedom to choose your own provider and negotiate your own rate.
That freedom has a real dollar value.
One retailer switched from software that locked them in on a payment platform and is not saving thousands of dollars a year.
Many international POS platforms tie their software to their own payment processing. To use the software, you use their payments, at their rate. It is easy to set up, and that is partly the appeal. Easy can be expensive.
This is like a tax on every sale.
When your sales grow, the money the software company makes from you grows. What are they selling: software, or a taxation system on your success?
When one vendor controls both the software and the payments, there is no pressure on the rate. You cannot shop around and you cannot negotiate, because the processor is built into the system you depend on. A small margin on every transaction across a year’s trading adds up.
A worked example
A specialty retailer turning over $1.5 million a year in card payments, on a bundled platform-tied processor, might pay an embedded margin of around 0.7% above the underlying cost of acceptance:
- $1,500,000 in card turnover
- 0.7% embedded margin
- Around $10,500 a year
If that same retailer can choose their processor and negotiate directly, moving to a competitively priced provider could save more than $10,000 a year. That stays in the business.
The exact figure depends on turnover, card mix and the deal negotiated. The basic calculation is the same for any retailer: when you can shop and negotiate, you can lower the cost. When that option is gone, you pay what you are charged.
Why we leave the choice with you
We could bundle payments into our software. We chose not to.
You know your turnover, your margins and your existing banking relationships better than any software vendor. Keeping that choice with you means you can shop the market, compare providers on rate and service, negotiate using your own volume as leverage, and change processors later without changing your POS software. When payments are locked to the software, switching processor can mean switching systems entirely. When they are separate, your options stay open.
A locked-in processor takes a quiet margin on every sale. Over a year, for a busy specialty retailer, that can be more than ten thousand dollars. The freedom to choose and negotiate puts that decision back where it belongs.
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