Major point-of-sale (POS) terminal manufacturer NCR acquired Texas P.O.S., a Houston-based POS provider for restaurants and merchants.

NCR Aloha
NCR Aloha POS System for restaurants
NCR Corp

Here’s what it means: This acquisition allows NCR to expand its hospitality business. NCR has been making acquisitions of regional businesses to gain a presence in hospitality. The firm recently acquired BEC, a Denver-based hospitality POS technology provider, which it said would complement its existing presence and expand its coverage within the US. Similarly, the firm said its acquisition of Texas P.O.S. will expand its existing regional sales presence for hospitality customer and its sales and services coverage in Texas.

The bigger picture: The US restaurant market represents an $825 billion opportunity, which has invited competition and caused crowding.

  • Restaurant management providers and larger POS players are competing for share in this massive space. Restaurant management platform Toast recently raised $250 million in a Series E funding round, bringing its valuation to $2.7 billion. And last May, Square launched Square for Restaurants, its first product for full – service restaurants, which it said was its most sophisticated software solution yet, with robust offerings such as restaurant management tools. Further, Bank of America Merchant Services partnered with cloud-based restaurant management platform talech to launch a POS solution for restaurant and bar owners with more than one location, while First Data said in its Q3 2018 earnings that it plans to launch a full-service restaurant-software solution. Acquiring providers with specific regional experience could give NCR an edge to onboard more merchants and build out a presence throughout different markets.
  • Restaurants need new solutions to manage and analyze their data in the same platform they accept orders and payments, creating a huge need for restaurant-specific POS solutions. NCR could build upon its existing solutions to cater them toward the restaurant industry: It could develop a restaurant-specific version of NCR Silver, its cloud-based POS system intended for small businesses, for example, to address the needs of that industry with over-the-top (OTT) features like business management tools. And as people increasingly prefer noncash payment methods, demand for new technology will increase among restaurants owners, which will open up more room for NCR to grow.
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