VARs' Guide To Payment Processing
By Business Solutions magazine
Significant Trends
EMV — “EMV [or smart cards with integrated chips] will not only affect how consumers pay but will be the catalyst of a liability to merchants who don’t adopt it. Merchants will ultimately need this technology that will change how they authenticate cardholders. Being prepared for the emerging mobile form factor is also key.” Eric Barth, senior director of product, TSYS Acquiring Solutions
Mobile Wallets — “The era of the digital wallet is beginning, and it will enable value-added mobile couponing, marketing, and loyalty that engage the consumer, help drive traffic, and increase sales and consumer loyalty to participating merchants. But no matter what wallet, app, or program consumers carry, they still need to interact with and authenticate themselves securely at a merchant point-of-sale system.” Erik Vlugt, VP of product marketing, VeriFone
Security Continues To Be A Concern — “It’s especially important for POS VARs to stay abreast of recent developments in payment processing such as point-to-point encryption (P2PE), a relatively easy way to reduce risk and preserve an already established revenue stream.” David Hunsinger, director of sales, SBS/Keystroke POS
Mobile Payments — “Mobile Payments is the other hot topic that we’re speaking to software developers about on a daily basis. However, security is a big concern along with the business need to remain out-of-scope. Developers are selecting technology partners that support a wide variety of mobile devices featuring P2PE.” Sean Kramer, president & CEO, Element Payment Services
Pitfalls To Avoid
Stay Involved — “Traditional POS resellers could have a tendency to let someone else handle payments for their retailers. As the POS industry evolves with the introduction of consumer-grade devices (phones and tablets), POS resellers need to become involved in the payments aspect of the solution in order to maintain account control.” Paul Constantine, president, ScanSource POS & Barcoding
EMV Will Bring Changes — “POS VARs should not underestimate the changes EMV will bring to the payments certification process. Unfortunately, the certification process is more costly and involves the purchase of test systems for the POS VAR. POS VARs who do business in other parts of the world already understand this.” Eric Barth, senior director of product, TSYS Acquiring Solutions
Understand Integration Needs — “When adding integrated payment processing to the software application, ISVs (independent software vendors) sometimes make the mistake of failing to incorporate critical processing functionality into their payment module, resulting in poor customer adoption.” Sean Kramer, president & CEO, Element Payment Services
Sell Complementary Services — “Many VARs fail to capitalize on devices, such as network threat sensors, that can help merchants comply with PCI requirements. Don’t make them look elsewhere for a solution.” Mark Morgan, reseller channel, SecurityMetrics
Don’t Skip This Recurring Revenue Source — “There are many dealers out there who don’t think that credit card processing is an important part of their business or they think it’s too complicated. Overlooking payment processing is a big mistake. Over time, the credit card side of the business can prove to be the most lucrative, and there are many processors who will train you or even do the work for you.” Rohan Mani, reseller division director, Harbortouch
Sales Advice
Adapt And Focus — “VARs must adapt their business models to use recurring income streams to match their merchants’ cash flow and financing requirements, cooperate with the ISOs in implementing these programs to dissuade those ISOs from competing against them, and focus on their core expertise of providing needs assessment analysis, installation, and after-market support services.” Terry Zeigler, president/CEO, Datacap Systems
Pick The Right Partner — “You have plenty of options when selecting a processing partner, so don’t sell yourself short. You can find a partner that literally handles the entire merchant account side of the deal, including paperwork and closing the deal. Some will even do the install or offer extra incentives for you to do the installation.” Rohan Mani, reseller division director, Harbortouch Open Architecture Software Working With Multiple
Third-Party Door Controllers — “Some VARs want to become a retail or sub-ISO. If this is a path you are considering, you really need to learn the ins and outs of the ISO business before taking the next step, including things like: the operating requirements of becoming a successful merchant service provider, competitive pricing, merchant agreements and risk management, merchant boarding, customer service and retention, and the various roles played by the card brands, processors, and wholesale ISOs.” Jeff Riley, CEO, Dinerware
Why Sell Payment Processing?
It’s A Must-Have For Retailers — “PCI DSS is a builtin market. Merchants are already required to obtain the technology that enables compliance with PCI. You might as well be the one providing it to them.” Mark Morgan, reseller channel, SecurityMetrics
Keep Your Business Growing — “Shifting card rules will also motivate merchant clients toward new technology. Anticipating these changes and preparing for them will keep your business growing and competitive in an increasingly dynamic and sometimes challenging market.” Eric Barth, senior director of product, TSYS Acquiring Solutions
Another Way To Help Your Customer — “Both mobile payments and offers/deals are here to stay. When implemented correctly, they will greatly benefit the merchant because it creates a much more robust way for the merchant to interact with the consumer and drive new behavior.” Michelle Plomske, VP of emerging technology, Mercury Payment Systems
Stay Relevant — “Any business that doesn’t adapt to such a broad industry transformation faces the prospect of operating a business model that is less and less relevant to its customers. Growth in mobile payments and increasing retailer demand for cloud-based payment services will spur increased opportunities for managed payment solutions that will generate deeper relationships with customers and more predictable recurring revenue.” Erik Vlugt, VP of product marketing, VeriFone