The Green Sheet Online Edition
May 11, 2009 • Issue 09:05:01
The drive toward integrated solutions
As businesses grow and mature, they tend to gravitate toward integrated technology, rather than mixing and matching products and services from multiple vendors. This trend is no different in retail payments, and you're probably already speaking with merchants who are looking for a broader solution than payment terminals.
It may well be time to evaluate whether you need to acquire the capabilities to offer integrated solutions or to partner up with value-added resellers (VARs) and integrators who build applications targeting specific vertical markets.
VARs and integrators specialize in understanding the specific needs of the market segments in which they've found fame and fortune. Providing wine merchants with a system that incorporates inventory management, customer relations management, accounting and financial management, and perhaps a Web catalog and order entry system for consumers is one example.
For these solutions providers, card payment functions are just a small - though vitally important - component of the total system. But card payment functions also represent an area where rapidly changing security requirements and the availability of new customer-facing acceptance devices may leave them exhausted and in need of a payment specialist's expertise.
Some ISOs may feel sufficiently entrenched in key market segments to justify the time and expense of building up the programming and marketing expertise to offer their own integrated offerings. Similarly, integrators and VARs often believe it's just as easy to add the payment component themselves as to blend in the handiwork of a new partner. For most on either side, however, reality and expediency make a partnership approach the wiser course.
For the ISO, developing a new business as an integrated solutions provider means acquiring new skill sets and support capabilities, as well as expanding marketing into new areas.
It's one thing to expand one's offerings - such as from credit and debit into gift cards - but it's quite another to leap into a completely new arena that requires operating system programming capability and the ability to acquire or develop the necessary accounting and customer management applications that an integrated solution entails.
On the other side, an integrated solutions provider may (or may not) be comfortable tying in a payment engine to handle basic payment processing. But is the integrator prepared to keep up with evolving Payment Card Industry (PCI) Data Secuirty Standard (DSS) requirements and ensure that all software complies with the Payment Application (PA) DSS? Not to mention, is it ready to provide more customized payment options such as checks, loyalty and gift cards, and an ever-widening array of payment terminals and PIN pads?
It's easy to make a case for partnerships between processors and integrated solutions providers. Each of these parties has the ability to extend its business by working with a more specialized partner.
Not only do they leverage each other's skill sets, but they also widen their pools of prospects by serving as referrals for one another.
Whether it is an ISO expanding into the solutions business, a VAR acquiring payment capabilities or a partnership of the two, the trick is how to actually handle the integration.
It's no easy task to turn any PC or other computer into a secure payment-accepting device without interfering with other applications running on the system.
Many merchants want their computers to handle multiple tasks, including inventory tracking, accounting, customer database management and human resource functions. Using a Windows -based payment engine, ISOs and integrators can offer:
- Customizable databases that securely store customer information
- Recurring billing features to schedule automatic payments
- Connectivity through dial or IP-based communications
- Robust reporting features
- The latest security standards to protect against fraud and data tampering
Adding basic credit card acceptance may be relatively simple, but when it comes to adding PIN debit, electronic benefits transfer, checks, loyalty and gift cards, plus support for multiple processors, things start to get pretty complicated for a software developer whose expertise lies in other areas.
Utilizing tools designed by payments experts, a developer can snap in different payment engines and different PIN devices utilizing one programming interface.
That way, rather than having to develop code to accommodate different devices and payment engines, the developer has a "write once" opportunity to provide customers with a multitude of payment options.
Certain tools are designed to isolate sensitive cardholder data from the POS application, greatly reducing the complexity and associated costs of achieving compliance with PA DSS requirements.
Robbie Lopez is VeriFone Senior Vice President and General Manager, Software Solutions, with global oversight of VeriFone's portfolio of POS payment processing software solutions for issuers, acquirers, retailers and merchants of any size. He can be reached at firstname.lastname@example.org.
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