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Wix Just Launched a Point-of-Sales System: Here's What Shareholders Need to Know

By Ryan Henderson - Jun 16, 2021 at 6:03AM

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In a first-of-its-kind move, Wix is going from digital to physical. Is this the right move for the company?

Last week, Wix (WIX -0.92%) -- the drag and drop website building and hosting platform -- announced that the company is launching a brand new point-of-sales (POS) system for its business customers. 

Though Wix is most popularly known for its digital solutions, the company has decided to team up with Stripe and HP (HPQ 2.07%) to help its retail customers better establish a physical presence. 

Credit card being passed off between two hands.

Image source: Getty Images

What does the product entail?

Wix is rolling out several different hardware kits for its customers to choose from. Whether customers want a comprehensive package including a terminal, cash drawer, receipt printer, and plenty more, or just a single product like the secure card reader, Wix can supply it to them. 

Each solution Wix is offering is comprised of HP-designed hardware, Stripe's card reading technology, and perhaps most importantly, Wix's unified software system. Businesses that began online can now simply pull the hardware out of the box, log in to their existing Wix account, and instantly access all their necessary data. 

From fully synced inventory to a unified product catalog, customers can run their businesses seamlessly across multiple different channels. While this is currently only available to stores based in the U.S., Wix plans to roll it out to other countries too. 

Why do customers need it?

In 2020, gross payment volume across Wix's platform grew by 126% to reach $5.4 billion. Driven by the pandemic, demand for online transactions accelerated rapidly as consumers took their shopping habits to the internet instead of going to physical retail stores. Subsequently, this created a boost among digital native businesses as well. 

In the company's press release announcing the launch of its POS system, Wix stated that e-commerce-enabled businesses built on Wix "grew by 45% between March 2020 and March 2021."

However, as economies around the world get set to reopen, consumer purchasing habits are going to change as well. Whether consumers are transacting with contactless cards, digital wallets, or even cash, merchants need to be flexible around payment acceptance or risk losing sales. This presented an opportunity for Wix to build an all-in-one solution, and that's exactly what it did. 

What does this mean for shareholders?

An endeavor into hardware can often be difficult for investors to digest, since it typically includes greater capital investment and lower profit margins, but it's worth remembering Wix's vision -- "to provide business owners with a full operating system to create, manage, and grow."

Although this new POS system could result in additional revenue on its own through its standard processing rate of 2.6%, it should instead be viewed as yet another layer of functionality that Wix offers to its customers. Now with hardware included, Wix offers just about anything a retail business could need. From secure website hosting to online and offline order processing, and a plethora of other additional features, Wix provides it all.

Though this might be a fairly obvious statement, every time Wix tacks additional functions onto its core offering, it boosts its value to its customers. This ultimately should result in higher switching costs and, in turn, greater pricing power. 

 

Ryan Henderson owns shares of Wix.com. The Motley Fool owns shares of and recommends Wix.com. The Motley Fool has a disclosure policy.

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Wix.com Stock Quote
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