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Comment by jjk166 | Hacker News Reader

The reader may be cheap, but the things its integrated with aren't. If it costs $20k to replace a gas pump and you have a half dozen pumps, the cost of replacing them might be comparable to the value of the gas station. A grocery store point of sale system is even more expensive, around $40k a pop. Maybe you're lucky and the manufacturer of your current setup has made it in such a way that the card reader can be swapped out without replacing the entire thing, but that's a big if.

It's not like this is an investment that will lead to more customers or new revenue, this is a big expense just to stay afloat. Getting financing for such an expenditure is extremely difficult. At least in a mixed ecosystem you might be able to recoup some of the cost selling your old equipment, but no one's going to buy it if it's going to stop working soon.

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>the manufacturer of your current setup has made it in such a way that the card reader can be swapped out without replacing the entire thing, but that's a big if.

This seems to be universal in Australia. Even the mega store self serve integrated systems have a separate machine mounted on for processing card payments.

Visa and MC put Australia in the Asia-Pacific region, and the regional rules and fees have been gradually changed (2004ish onwards) to favour chip payments. There still had to be an extravagant amount of re-work for ATMs and compromises to suit some of the major players in Oz, whose quirks dictate the norms for the rest of the market.

Even if the machine is physically separated, it still needs to be integrated. At the very least, you need a way of telling the machine what is owed and a method for the machine to communicate back that the amount has been payed, and it can't be easily spoofed. Nowadays there is a lot more customer specific integration as well (deals, rebates, signing people up for mailing lists, etc). There are about a dozen different communication standards for POS systems, and some POS systems support more than one, but there are also boatloads of proprietary communications protocols floating around. Presumably you're replacing the POS system with one from the same manufacturer, so the communication protocol is likely to be supported, but that doesn't mean any custom software you have on your system will run as is.

And even if you can hotswap a POS system, they're still expensive. A machine plus software is about $4000 per lane, and that's when you're not a captive market. Even small retailers typically have enough lanes that this is a significant expense. People in this thread are giving prices for Square readers which 1) are not at all sufficient for most businesses and 2) are sold at a loss while Square makes its money on transaction fees and subscription services (the same is true for the rest of the Square clones). It's like comparing a home projector to a movie theater projector.

It is weird that a lot of folks in the thread ignore the very real costs of transition. If there was a nationwide subsidy system for retailers from merchants and banks for fraud reduction en masse, then the transition would be smoother. But since there isn’t it’s partially an iterated prisoner’s dilemma.

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