Coming out of the ETA Annual Meeting and Expolast week in San Diego, I was left with the impression (as many inthe analyst community and industry press have also noted) thatmerchant acquirers and service providers have gone mobile. That is,they have solutions for mobile merchants or really any “merchant”who wishes to accept payments using his smartphone and a relativelyinexpensive add-on card reader.
As anyone who’s uttered the word “payments” over the last year,year-and-a-half surely knows, there’s been some discussion aboutthis.
Mercator published a report coming out of last year’s ETA focusing on the vendorsector of the mobile POS space, and the various Squares and Sledshad just begun offering ISOs and acquirers for white-labeling anddistribution.
Well, it seems the distribution has begun in a big way.
Not to be outdone by the disruptive player in the room(ahem…Square), a slew of major acquirers, ISOs, and others havedeveloped their own solutions to address what is potentially a veryattractive market.
But many of these solutions are reactive to Square and constitutemerely defensive plays. Very few of this crop of mobile POSmerchant providers are thinking creatively in a rigorous way. Sure,a 20 million merchant market opening up may lead anyone to think”how can we go wrong?” But without a plan for niche segmentationand targeted solutions, competition for the general populace ofpotential card acceptors via smartphone could be quite bloodyindeed.
In the ISO business, competition is fierce. Intelligence about whatyour competitors are doing is essential for success. Lack ofdifferentiation in new products just transliterates the same issuesto a new market.