Q&A | May 29, 2014

POS VARs: Are You Smarter Than Your SMB Customers?

Bernadette Wilson

By Bernadette Wilson, associate editor, Business Solutions magazine
Follow Me On Twitter @bernadeditor

POS VARs And SMB Customers

The average SMB customer in the market for a point of sale (POS) system fits a different description than customers in that category a few years ago. Rod Hometh, senior VP of market development for Ingenico, says, in the past, your SMB customers adopted “trickle-down technology,” tried and proven by larger enterprises. “But a lot of powerful forces are impacting adoption now,” Hometh comments. He lists three characteristics of a “new” SMB client that will help VARs deal intelligently with them:

  1. SMBs Have Heightened Awareness Of Security And EMV. SMBs are paying close attention to the importance of encrypted transactions and PCI (Payment Card Industry) standards as they relate to security. The cyberattack that led to Target’s highly publicized data breach has served as a wake-up call, and as SMBs prepare to take measures to strengthen security — like move to devices enabled for EMV (a global standard for interoperable, secure payments) — VARs have to be ready for that transition. Your clients will expect you to make those solutions work accurately and securely — and to make them work for their businesses by integrating functions such as marketing and data collection. In addition, EMV will change how a consumer provides payment, and your merchant clients will want to ensure their use of the system will result in a positive experience for them.    
  2. SMBs See POS As A Competitive Vehicle. In the past, SMBs might have passed out flyers or made sure they had a visible presence in their communities to market their businesses — but they now see POS systems as a powerful and immediate way to deliver messages, as well as providing tools for business management and data collection. Hometh says barriers that might have limited choices for SMBs are falling. SMBs can access virtually any tool as other merchants through cloud and even the least expensive terminals are equipped with capabilities that were only available in the top-of-the-line a few years ago. SMBs no longer think of a POS terminal as a stand-alone device. Hometh advises VARs also to adjust their view of the terminal’s role in a solution: “We are moving away from discussions that counter top terminals have a less-than-bright future. They have an extremely bright future as a hub for management solutions.”
  3. SMBs Understand The Importance Of Customer Engagement. SMBs are exploring what can be done to enhance the shopping experience. Hometh says it is becoming vital for VARs to understand their role in helping merchants engage their customers. One example is providing solutions that recognize people as loyal customers. For some time, large merchants have been able to identify frequent shoppers through a loyalty card or ID. This capability is now available to SMBs, who can now also reward loyal customers or specifically target them with special offers.

Hometh also characterizes SMBs as “a little more apt to experiment” with innovation than their larger counterparts. “They will look at new programs or pilot new solutions, and they understand how they can mitigate risks. They know there isn’t just one way to do things.” This is good news for VARs — if they are keeping up with those new innovations. “VARs have to be able to talk this talk with merchants,” he comments.

Hometh lists things VARs can do to stay educated and competitive. Being active in a partner community can help VARs stay current on trends and new technologies that enable them to have smart conversations with their customers and prospects. He says he sees this with the Ingenico partner community, which has a synergy that helps them stay on top of the market and stay competitive in this rapidly changing environment. He also sees VARs emphasizing the “value-added” part of their roles. Recently, he observes more VARs differentiating their businesses and hiring for skills and expertise in customer engagement to vie competitively for merchant accounts.

In the last few years, Hometh also has seen more resellers becoming ISVs. With tools to develop apps now readily available, and — in the case of Ingenico’s line, one OS is used so apps can be used on all devices — he explains, “They’re taking it upon themselves to write software and really competing with each other on a much more technical scale.”