Consider the following circumstance happening all around you. A modest local merchant operating a steady business has had a “Brand X” POS system for some years now, which continues to work well and reliably. He remains satisfied with the merchant services provider who sold him the equipment some years back and who diligently maintains it. Yet, recently the merchant has seen a growing trend toward m-Commerce in his traditionally wired business sector and believes that he, too, has an opportunity to benefit not only from this expanding mobile channel, but, perhaps, by integrating multiple other channels, as well, such as line busting strategies, social media integration, and honoring online offers. For example, this merchant could be a neighborhood dry cleaner that is contemplating a concierge pick-up and delivery service that will cater to the corporate community downtown. Or it could be a clothing retailer, or some other storefront operation, that wants to begin holding tent sales in the parking lot or market merchandise at outdoor fairs.
Two significant challenges immediately arise when initiating such a multichannel move, particularly for the smaller merchant. First, the dry cleaners and the retailer will now need to invest in mPOS, or mobile Point-of-Sale technology, in order to process purchases wirelessly, whether from a remote executive’s office downtown paying for a newly pressed suit or the parking lot around back processing liquidation sales. Even if the merchant is willing to do the research in determining which mPOS is right for him or her, they are faced with a second, and even greater challenge: the dilemma of introducing a separate sales and payments infrastructure into the business that is not integrated with the merchant’s main POS system, thus causing costly redundancies with no unifying back-office integration.
The resulting duplication of back-office systems for reconciliation and accounting, as well as the potential that each system will have a different payment processing chain and financial institution, will have a significant impact on operational efficiency. In addition, inventory, accounting and business management must be reconciled across two systems; marketing, couponing, and loyalty programs must run separately; staff must be trained on multiple platforms; hardware must be certified and then updated independently. The list of inefficiencies and inconveniences goes on, and most are downright counterproductive to the merchant’s day-to-day business. In short, it’s a nightmare that many merchants simply choose to avoid, and it’s a problem for which merchant services providers have not yet come up with a suitable solution, until now.
What Does the ISV Provide?
Enter the ISV, or Independent Software Vendor, an interesting and ideally positioned intermediary for solving the many POS business problems presented above. ISVs tend to identify integration holes in the marketplace, and using a variety of software and technology tools, create the glue needed to seamlessly join the essential elements that create an efficient service model. ISVs make it their business to custom-build reliable unifying back-office software solutions — which can be transaction-chain-agnostic — that address the concerns of the three most important entities in the payments ecosystem: the merchant, the merchant services provider, and the consumer. These solutions can be POS-brand specific, or broad-based solutions that leverage the common operational standards employed in many systems. With just one of these flexible software solutions, the ISV can solve the diverse portfolio needs of the merchant services provider, the system integration requirements of the merchant, and the market demands of the consumer. All in one fell swoop.
How? By bringing mPOS and other multichannel capabilities to hard-wired brick and mortar merchants that are seamlessly integrated with their legacy POS systems. As such, there’s no longer a need to run and reconcile two different payments systems: wired, wireless, or other. One unified system, integrated by an ISV software solution, can now manage both. And, in most cases, the ISV’s solution links the mPOS system directly to the merchants’ main system, so that the merchant can avoid a host of fragmentation snags, obstacles, and pain points.
An Integrated Win For All
Merchants are made happy with the help of ISVs because they are now able to tap into the widely spreading mobile commerce trend more logically, as well as being able to offer other innovative value-added multichannel specialty functions — all without having to negotiate the day-to-day operational challenges or informational silos that occur when running two or more different POS systems. In addition, they are able to derive even greater value from the core legacy systems they originally invested in as a result of extending their useful life and stretching ROI by seamlessly adding mPOS capability. And, better still, they can keep up, or even outpace, the competition by offering the kind of extended services consumers have come to expect.
Independent Sales Organizations (ISOs) and other merchant services providers in the payments industry benefit because they are able to provide their merchants with the extended features and functions the market is demanding, all with the seamless ease and integration that today’s merchants expect, while alleviating the burden and expense of learning new technology from providers. Seeing the flexibility and capability that the app world has brought to smartphones and tablets, merchants have already come to ask what it would take for their own POS systems to be as creative, integrated, friendly, and functional as their smart devices. The ISV approach certainly provides a solid response to these lingering questions.
The consumer continues to benefit, of course, by having a greater number of businesses in their personal and professional spheres being able to support their increasingly mobile and on-demand digitally driven lifestyles.
Ease Makes Adoption Easy
Ease of integration, deployment, and maintenance comprise the trifecta for the successful adoption of any new technology. Even if potential for added revenue is high, potential users — in this case, merchants — will shy away from adoption if the experience appears to be too hard or disruptive to implement. Which is exactly why the ISV model is becoming so popular in the payments space.
Technology manufacturers and other providers, in fact, are building and offering API kits to ISVs to enable and encourage such independent software development. These creative developers are offering highly relevant, straightforward, problem-solving software solutions that greatly benefit the players involved. ISVs are, quite literally, rewriting the payments game by offering common sense solutions for mobility integration as well as other value-added multichannel opportunities. If they are not currently on your innovation radar, they certainly need to be.
