Together with Microsoft Corp. no longer supporting its Windows XP operating system, companies marketing tablet-based point-of-sale gear and software are hoping to garner more business from small and mid-sized businesses seeking to replace POS systems using the outmoded OS.
As expected, computing giant Microsoft stopped support for its 12-year-old XP on Tuesday, but merchants accounting for millions of points of sale are still running PCs equipped with the OS to handle functions from card transactions to loyalty programs to inventory management.
With Microsoft no longer supporting the applications, users will no longer get online updates, including so-called patches that fix security holes that could allow hackers to penetrate users’ systems. That makes XP more insecure, experts say, and also means users are no longer compliant with the Payment Card Industry data-security standard (PCI).
While exact numbers on how many merchants are using XP are tough to come by, the OS remains quite popular, especially with small and midsize businesses. Some 73% of small merchants are running XP in some form, such as for POS transactions or on servers, according to a recent survey by ControlScan Inc., an Alpharetta, Ga.-based security-services company. Ninety-two percent are aware that Microsoft ended support this week, but funding constraints and other considerations have kept many of them from switching out equipment, the survey says.
The new vulnerability of the existing gear comes as merchants which range from giant Target Corp. to smaller retailers are reporting data breaches that have exposed data on tens of millions of payment cards.
As more of these merchants begin looking to replace or shore up XP-based systems, a growing legion of tablet POS vendors hope to benefit.
“We want people to switch,” says Jason Richelson, founder of New York City-based ShopKeep Inc. and himself a former merchant. “It’s a big deal. More than likely they will get a virus on their machine and won’t have the ability to rebuild the machine or reinstall the software.” Six-year-old ShopKeep delivers a cloud-based system that relies upon the iPad and enables merchants run transactions, keep track of employee hours, manage inventory, and perform other business purposes. ShopKeep accepts card transactions and also supports payment choices like PayPal and LevelUp.
“It is going to take some time, but yes, absolutely” the end of XP support will be a”catalyst” for tablet-based POS systems, Richelson tells Digital Transactions News.
In a recently released six-page white paper co-produced with ControlScan, Richelson advises merchants using XP that their choices would be to update to Windows 7 or 8, continue to use XP but switch to POS terminals for card transactions, or adopt a tablet linked to a cloud-based system. Tablets typically come from many vendors with card readers, receipt printers, and cash drawers.
The newspaper tells merchants they can easily tell if their PCs are running XP by clicking on”Run” under the”Start” command in the task bar. They could then type”Winver” in the search box and click “Enter” to bring up the version of Windows the device is operating.
ShopKeep just released version 2.0 of its system, featuring faster transaction times that Richelson says will make it much easier for the product to penetrate new markets like full-service restaurants and bars. Most of the provider’s current customers are small retailers and quick-service restaurants. The business will also launch later this quarter a new product that will work with handheld devices like the iPod touch, Richeleson states, allowing retail personnel to serve clients anywhere in the store.
ShopKeep works with some 10,000 shops and is processing transactions amounting to $1.5 billion on an yearly basis, Richelson says.
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For the previous four decades, Richelson was using a traditional Windows-based point of sale system and has been fed up with all the tech problems, including one especially brutal experience where the servers crashed while he was on holiday, forcing his shop to temporarily close.
He built ShopKeep to resolve all the problems he faced with his old system. The company offers small business owners a complete hardware and software product that gives them a wealth of data analytics as well as a means to monitor workers and scan credit cards with an iPad dongle, like what the mobile payments startup Square offers. Because all of the software is cloud-based, users are safe from the possible havoc wrought by one crashed server.
The business targets brick-and-mortar businesses of varying sizes whose owners are sick of using old, clunky systems that offer little to no customer service. ShopKeep not only lets users ring up sales, but track and manage their inventory, log client information, and look for trends in earnings data.
“ShopKeep makes it possible to run a better company,” Richelson told Business Insider. “A lot of our customers try Square first. But, for them, it is about collecting credit cards and doing payments. For us, it is about what’s the next feature we can add to help our clients make more money.”
Richelson says that his company — which has currently has over 10,000 customers around the U.S. and has increased $12.2 million from investors such as Tribeca Venture Partners and Canaan — assists small companies in a more full-circle manner than Square, the startup that Jack Dorsey established that’s over $340 million in financing and multi-millions of consumers.
Going up against giants such as Square and Groupon (which provides a point of sale app called Breadcrumb) with recognized names and big followings won’t be easy, but Richelson, who says that ShopKeep’s number of customers has tripled every year since launch, is in it for the long haul.
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