Make payment investments count

Maintaining a strong POS strategy is critical even in a down environment, and as retailers decide where to put their dollars, it’s important not to overlook areas that are worth the investment. Here are some tips from Greenwood Village, Colo.-based payment-processing company First Data:

Upgrade POS terminals. A POS upgrade will require an upfront investment, but choosing the right one will help save company money in the long run.

Consider looking for a system with a terminal/printer combination to lower infrastructure costs. In addition, small businesses can also take advantage of low-cost terminals that provide the same flexibility as larger retailers’ POS systems and that will adapt and grow with their small-business needs.

Retailers of all sizes should keep an eye out for systems that focus on improving customer wait times at the register, such as those that enable faster transactions via quick printers that speed through text, bar codes and graphics. Also, choose reliable connections to avoid lost sales and be sure to invest in fraud-protection functionality.

Reconsider check acceptance. Checks are a cost burden—representing a higher risk for fraud and often requiring a wait of several days to retrieve funds. But electronic acceptance technology can help trim bank fees and processing costs while giving retailers the flexibility to deposit checks from their own location and collect funds faster. Depending on individual needs, a merchant can choose a point-of-purchase solution that submits checks for deposit directly from the point of sale or a back-office conversion that allows for the deposit of all checks at the end of each day.

Try contactless payments. Although some retailers are still wary about offering in-store contactless payment options, the method is booming overseas, especially in the mobile-commerce space, and is now growing here. There are about 19 million contactless-payment devices currently in circulation nationwide, and Jupiter Research predicts that approximately 10% of all U.S. payments will be contactless by 2010.

Contactless payments, which can be added through a low-cost deployment or retrofitting to current POS terminals, offer a number of benefits for revenue generation and long-term cost cutting. For starters, transaction processing is much faster (customer time at POS is reduced an average of 30% to 40%).

In addition, switching cash-paying customers to contactless payment will increase spending 20% to 30%. Having this type of POS infrastructure in place also will put retailers in a good spot for the mobile-commerce boom expected in the near future.

Don’t forget about prepaid-payroll solutions. While direct deposit is a long-standing solution, millions of American employees remain unbanked and don’t have the traditional banking relationship needed for this payment option. Retailers can provide the benefits of electronic pay and reduce administrative costs via a pay-to-the-penny solution, such as a prepaid card that can also serve as a checkbook for employees. And depositing to a payroll solution costs about 10% of printing and distributing paper paychecks.