Wine may improve with age, but point of sale technology does not.

Years ago, when ShopKeep POS founder Jason Richelson operated the Green Grape wine store in Fort Greene, Brooklyn, he struggled so often with archaic point of sale systems that it motivated him to develop his own alternative.

Richelson had several problems with the store’s point of sale system. Because information was stored on the server, he had to be in the store to check reports. He also couldn’t get much support from the terminal manufacturers if problems arose.

“The final nail in the coffin was when I was on vacation and the server crashed in the store…because there were viruses on the Windows machine,” Richelson says.

So in 2008, while still working at the wine shop with his partner, Richelson launched ShopKeep as a cloud-based system. When Apple unveiled its iPad in 2010, the tablet became “a catalyst for making innovative point of sale systems much more affordable for merchants…especially small merchants,” Richelson says.

Before tablet-based systems, point of sale equipment was usually a Windows PC touch-screen which costs about $3,000, he says. IPads cost around $500, so ShopKeep quickly adopted the tablet as the basis for its own point of sale system.

The company of about 100 people started in co-working spaces in downtown Manhattan, and has since moved to its own office in Soho. ShopKeep recently opened an office in Belfast, Ireland and plans to target European merchants soon, Richelson says.

ShopKeep’s founder already had some experience in payments from co-founding Internet Cash in 1999. The company developed a system for consumers to buy online anonymously. Consumers would use a prepaid card with an Internet Cash-hosted payment page, rather than using their own credit cards.

ShopKeep charges merchants $50 a month per register. Merchants pay transaction fees directly to their processor. ShopKeep works with processors such as First Data, Heartland Payment Systems and Mercury Payment Systems. It also works with SCVNGR’s LevelUp, a mobile payment and loyalty system; and PayPal, which can process both PayPal and credit card payments.

PayPal has been a strong promoter of ShopKeep, mentioning the point of sale provider in much of its marketing and promotional material. ShopKeep also helped test PayPal’s mobile wallet in 2012 at a film festival in New York.

“PayPal is one of the partners that has helped us grow the business,” says Richelson. “It’s an innovative service and lots of our customers use it.”

Since its launch, ShopKeep has amassed more than 10,000 small independent retailer and quick-service restaurant customers. The company had seen a lot of adoption in Brooklyn, its home town. It has steadily updated its technology with features such as a customizable interface and QuickBooks integration.

All of ShopKeep’s customers come inbound, meaning they call the company looking for point of sale systems. The company also offers its Surround 360 software through independent sales organizations, though it is phasing this offering out to introduce a new program in the second quarter.

ShopKeep has seen steady growth, tripling its number of storefronts every year for the past three years, Richelson says.

“I truly believe in five years you’re not going to see any more PCs behind the counter…instead you’ll see tablets in a lot of retail stores, mostly iPads,” says Richelson. This will be influenced also by Microsoft ending support for Windows XP in April, forcing merchants to seek a replacement to stay secure, he says.

Richelson’s prediction is confirmed by research from Mobey Forum, which states that mobile point of sale terminals will reach 46% market penetration by 2017.

The Green Grape still operates in Brooklyn, but Richelson sold his half to his partner two years ago to focus on ShopKeep. The store’s profits helped fund Richelson’s work for the first few years before ShopKeep got venture capitalist investment, he says. Green Grape still uses ShopKeep’s technology today.

“I have big aspirations to be the first software as a service company that comes out of New York with a billion dollar valuation,” says Richelson.

Alissa McCue

Alissa McCue

Alissa McCue has over 10 years of marketing and public relations experience working for top brands in retail and technology. As Senior Manager of Public Relations at ShopKeep, a leading iPad Point of Sale System, Alissa is focused on highlighting ShopKeep's major achievements and thought leadership in the POS and technology space for independent businesses.