NCR Rivals PayPal As Square's Scariest Competitor

In June, NCR is slated to launch NCR Silver, a new product that will enable merchants to accept payments via iPad or iPhone, just like solutions from Square, Intuit, and PayPal.

Chances are you've never heard of NCR. But if you've used an ATM, a self-checkout lane at the grocery story, or a ticket kiosk at the airport, then you've likely used products created by the 128-year-old company. Now NCR, which did $5.4 billion in revenue last year, is jumping into Square territory.

In June, the company is slated to launch a new product, called NCR Silver, which will enable merchants to accept payments via iPad or iPhone, just like solutions from Square, Intuit, Revel Systems, and PayPal. NCR believes its established distributions channels, experience in point-of-sale retail, and data analytics will give the company the edge over competitors. "There's 200 companies out there that'll take your money, but we're helping retailers know what inventory they need, when they need it, and what price it needs to be at," says Christian Nahas, VP of speciality retail at NCR. "Everyone would like to tout how big Square is—and they've done a good job making themselves relevant—but we processed more than $7 billion in transactions last year in [the POS] space. We think Square is a great solution if you're a hobbyist."

On the surface, NCR Silver doesn't look too different from Square. An iPad is equipped with an NCR Silver card-swiping tool; it connects to the 30-pin connector port on the bottom of the device, as opposed to the headphone jack. The system is controlled by the iPad, and can wirelessly connect to a cash register and printer for paper receipts. NCR's software offers inventory management services, as well as sales metrics. Nahas ticks off the various options: "You can see a snapshot of what's happening over the last seven days or six weeks; you can see net sales, profits, the types of transactions; and you can dig in to categories such as individual sales or profits per sale." The solution will be available for a flat rate of $79 per month.

William Nuti, CEO of NCR, says the software's marketing tools give the company another competitive advantage. If consumers opt in to provide merchants with their email addresses, the merchants can offer deals and discounts tied to inventory. "You can send a message to someone who bought a pair of running shoes and hasn't been back in four months; or if you're a wine shop, and you just got a new shipment of red Bordeaux, you can send a message to everyone in your database who has bought red Bordeaux there before," Nahas says.

"We think we have a better solution than Square does," Nuti says, bluntly.

Square, of course, would disagree. The young startup is already processing $4 billion in annualized payments, more than double what it was processing last October. It too offers a comprehensive solution complete with detailed analytics via the Square Register. It has a big head start on the iPad-payments market in the eyes of consumers, merchants, and the press. And the design of its apps and hardware, in my view, is much cleaner and more modern. (It doesn't hurt to have Jack Dorsey at the helm, after all.) Plus, the company already has Pay With Square (formerly CardCase), the app that enables users to pay from one's iPhone or Android device without having to reach for a credit card.

NCR acknowledges some of these advantages. "Square has a very interesting proposition around taking payments, and with their CardCase," Nahas says. "We think it's very complementary to some of the things that we're doing. We're talking to Square now about whether there's a place for our two approaches to this same market to fit together."

"Companies like Square and PayPal will probably end up being partners of ours," Nuti says. (Square declined to comment, and NCR would not go into detail about what such a partnership might look like.)

In the meantime, NCR plans to take advantage of its distribution partners to sell NCR Silver to local merchants. Because NCR is one of the world's largest providers of self-service retail tools, it has many partners in the telecom, retail, and financial services industry; it's flexing that distribution muscle to promote NCR Silver. "There's a number of different places a small business needs to go to set it up," Nahas says. "You'll probably need a small-business loan, so we're working with our banking partners to say, 'Hey, when somebody comes in to get a loan, why don't you pitch them on NCR Silver?' Then the bank can say, 'You can sign up and give us access to your reports, so once a quarter we can show you how your business is actually doing.'" The company is also in talks with AT&T and Sprint to do the same when SMBs sign up for Internet and phone services.

"Even if we had only an equal solution to one of those other players like Square or PayPal, we have a huge advantage in terms of our global distribution channels," Nuti says. "So I'll take their market caps, add them to NCR today, and be happy with that."

Lastly, NCR, which boasts more than 23,000 employees, believes its competitors cannot compete with the company's customer-support network. "Think about Square and PayPal: If a customer is having trouble with a wireless network, or they can't get the cash drawer to kick, they're picking up the phone and hoping Square can walk them through it," Nahas says. "We've got the ability to deploy a person to knock on your door, and make sure the thing works for you. If I'm a small retailer, and this is the sole location where I can do transactions—as opposed to a Target that has 26 lanes, where if one goes down, I can just shift my employee to the next lane over—then this is my lifeblood. If it goes down, I need to know that I'm going to have instant feedback—that someone is able to come out and solve my problem."

Still, despite those potential advantages, NCR is still very late to entering the crowded iPad-payments space. Does the company still think it can win?

"I think we have a better mouse trap," Nuti says. "Now, the world doesn't know that yet because we haven't launched, but when we do, we're going to surprise a lot of people."

[Images Provided By NCR, and Square]

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  • Frank Sullivan

    This looks interesting. A Canadian company called Payfirma is also doing the same and already has significant market share in Canada, rumor is they will be releasing their global product next few months...and it's free! Just pay the transaction cost of 1.99% 

    Lots of payment processors are getting into mobile, it's those that do it the cleanest and easiest to use (like Square) that will win in the end.

  • abdul r. hamidullah

    This is classic.  Didn't anyone read The innovator's Dilemma? Really??  

  • Mark Stevenson

    Interesting feed as the name of the game is POS not payments at the end of the day.  Of course Square and paypal are not POS companies as NCR and Revel Systems are POS companies.  When you look at the client list NCR has not even launched yet????  Square has over 100,000 clients  paypal who knows how many they also just launched.   Revel Systems and Square are the oldest in this bunch,   Going by what I know about software when you release a new product it is about a year before it is perfect and ready for market so NCR releasing in June you can count on it a year from June before it is really made for main stream.   Look at Revel Systems  they don't have 100k in clients but they have the largest tier one customer base.  Example look at Square their largest customer is a mom and pop quick service restaurant.   Take Revel Systems their largest shop is Popeyes chicken restaurant teir one customer.   To me  if you look at technology Revel Systems is in the lead out of all the companies if you look at client base square is in the lead.   What to do when the two run into each other?  WIll square and Revel team up?  Good question?  will NCR and Square team up?  

  • David in SF

    "The solution will be available for a flat rate of $79 per month."

    So the card plug-in and software cost $79/month?  That's almost $1000 a year just to have this thing.  I notice that there is no mention of how much card transactions costs - prob because those rates are unchanged.  There is also no mention that that cute register set-up would also be an additional cost - of how much exactly?

    I suppose if you want to pay all that there's nothing stopping you.  

  • Joe Aguayo

    Yes, Square was first and has done a great job leveraging their first-mover position to build their business. However, POS is NCR's life-blood. It invented the industry, is trusted by the world’s largest retailers, and has the service network to support its products. It will be interesting to see who comes out on top. In my view, there’s room for both.