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IBM is reportedly in early-stage talks to purchase iPad-based point-of-sale (POS) firm Revel Systems, according to sources that spoke with Bloomberg.
Though both companies refused to comment, IBM could begin running trials of Revel’s product, which is used at retailers including Cinnabon and Goodwill, later this year. Revel was valued above $500 million following a $13.5 million funding round last August.
The sale could help IBM break into a fast-growing and lucrative segment of the payments industry. Buying Revel could help IBM regain a share of the payments hardware business. In 2012, the firm sold its POS terminal business to Toshiba for over $800 million, according to Bloomberg. As card payments continue to become more popular, buying Revel could help IBM build a new stream of revenue.
Revel in particular has some features that make it a lucrative purchase. As the mobile point-of-sale (mPOS) industry becomes more competitive, top players are doubling down on their software and services offerings in order to grow their revenue and keep clients loyal — for example, Square’s software and data revenue segment grew 197% year-over-year (YoY) in Q1 2016. Revel offers many of these services, including scheduling, payroll, inventory, and shipping and delivery functionality. These offerings could make Revel, and by proxy IBM, competitive with other processors, mPOS providers, and software firms immediately upon entering the space.
Revel is just one piece of the larger payments ecosystem, which contains processors, card networks, and more.
Evan Bakker and John Heggestuen, analysts at BI Intelligence , have compiled a detailed report on the payments ecosystem that drills into the industry to explain how a broad range of transactions are processed, including prepaid and store cards, as […]
