Retailers See High Cost Of In House Payment Processing

Sintel-Systems-POS-6i-1Retailers share the view that retail point of sale is under siege from online criminals. And now, ahead of the holiday shopping season, they’re being asked to deploy a variety of new solutions designed to improve the retail experience for their customers.

“And that puts an undue burden on retailers of all size,” says Merchant Warehouse Chief Revenue Officer, Ken Paull in a post on, “Why Retail POS Is Under Attack.” “There’s just so many things happening in our industry,” adds Paull.

As the only full-service point of sale provider — from software development to franchise incubator to ongoing support — part of Sintel’s commitment to our customers and industry is to share ideas and information. Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of the latest point of sale technology and security news to achieve financial success.

In the post, Paull also shared his theory about why retail point of sale is such a fertile hunting ground for cyber crooks.

“I do think some of the timing [of these breaches] is correlated with what retailers have being doing over the years to bring a lot of the payments systems and payment in house, and onto their systems,” Paull says. “I think in the last 10 to 20 years there’s been a trend towards taking enterprise payment capabilities in house, retailers bringing their own switches and concentrators in house. That allows them to really commoditize the payment processing and reduce the cost per transaction down.  Saving money has been a big driver.”

But Paull saw one gigantic unintended consequence: making the point of sale highly vulnerable and negating whatever cost savings might have been generated.

“[Retailers] could in the past really optimize their costs for payments processing, but I think in reflection we’re going to see that trend reverse because you can only afford so many of these breaches,” Paull tells “In house systems, particularly those tied to many separate retail locations, are prime targets and one that cybercriminals are getting extremely skilled at targeting.  In 2007 TJX dominated headlines when its POS was compromised, same with Target in 2013.”

Paull doesn’t see any magic bullets in the situation. He views EMV as a hopeful technology, but says it’s not something the CTOs he works with really believe is the solution to their security issues.

And, regardless of EMV’s effectiveness, it’s not a solution that Paull believes the industry will be anywhere close to having in place by October of 2015, when the liability shift is scheduled to take effect. “[EMV] is nowhere near the only priority, and in some cases it’s not a top priority given the other things that are going on,” Paull tells

Among those “other things” include the complexity to secure the point of sale while finding a way to accommodate the mobile preferences of their customers, such as Apple Pay, PayPal Here and Google Wallet.

“Merchants have spent the last decade or two moving systems in house just in time for those systems to become much more complicated to manage in-house efficiently and effectively,” says Paull. “The combination of all the security challenges and payment and tender types is converging on companies.”

Paull tells that because retailers increasingly understand that the environment is becoming much too complex for them to manage effectively on their own, the trend for in house point of sale management will shift once again to outsource providers.

Paull thinks the pendulum is starting to forcefully swing back to retailers wanting to devise the most efficient total payments strategy, not only one focused on saving money by bringing things in house.

“I do think this will be interesting to watch,” says Paull.

Read the full post here.

For more insights into point of sale security, check out our related posts, EMV Technology Chips Away at Credit Card Fraud, Near Field Communications And Tokenization Behind Apple’s Point of Sale Play, MasterCard Mandates Contactless Payments At Point Of Sale, Breaking Point Of Sale, As Cybersecurity Becomes A Market Differentiator, Retailers Seek Validation and Best Practices For Securing The Point Of Sale.

Just as Sintel shares our vast point of sale experience and expertise with startup owners in order to help them make the best decisions from the very beginning, we are happy to share articles, advice and commentary about retail point of sale and security.

Whether you’re a first-time franchise hopeful, a small business owner or an established chain, it’s always smart to stay on top of the latest point of sale best security practices to achieve financial success.

If you are interested in learning more about Sintel’s point of sale systems and how our knowledge and support can impact your future success, call us for a complimentary phone consultation.

Sintel Systems is the only direct to end user full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shopspizzeriassushi restaurantscafés and retail stores.

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